3 September 2014

Epistar’s acquisition of Formosa Epitaxy approved by shareholders

At a special general meeting on 1 September, shareholders of Epistar Corp (Taiwan’s largest manufacturer of LED epiwafers and chips) have approved the acquisition of fellow Taiwanese LED epiwafer and chip maker Formosa Epitaxy Inc (FOREPI). FOREPI’s shareholders have also approved the deal in a separate shareholder meeting. Taiwan’s Fair Trade Commission issued its approval of the acquisition last week.

As announced in late June, Epistar is to issue 174.612 million new shares (worth NT$10 each, totalling NT$1746.12m) to acquire FOREPI through a stock swap of 1 Epistar share for 3.448 FOREPI shares (to be completed by end-December 2014).

Epistar is currently the world's largest manufacturer of aluminium gallium indium phosphide (AlGaInP) epiwafers and chips and the second largest of indium gallium nitride (InGaN) epiwafers and chips.

According to a report by Taiwan’s Central News Agency, at Epistar’s special general meeting chairman Lee Biing-jye said that the firm is keen to raise its economy of scale, as a larger-sized supplier in the global LED industry could grasp a larger market share. Lee said a larger Epistar is expected to meet rising demand in 2015, in particular in the second quarter of the year, when peak season effects could boost shipments.

After the acquisition, Epistar will become the biggest vendor of both AlGaInP and InGaN LED products and will have a 30-40% share of the global LED epiwafer and chip market, it is reckoned.

Lee also said that, as the global LED industry is on the road to recovery, Epistar has to position itself well to take advantage of the upward trend by raising production capacity, and the acquisition is part of its efforts to launch new products and boost Epistar’s capacity.

In the production expansion stage, Epistar will need a larger workforce, said Lee, and the acquisition will allow the firm to make better use of FOREPI’s experienced staff. Epistar is unlikely to make massive layoffs after completion of the acquisition, he adds.

See related items:

Epistar to jump from 11% to 15% of global GaN epi capacity after FOREPI merger

Epistar to acquire Formosa Epitaxy to expand capacity

Tags: Epistar Forepi LEDs

Visit: http://focustaiwan.tw/news/aeco/201409010019.aspx

Visit: www.forepi.com.tw

Visit: www.epistar.com.tw