Epistar and Taiwan Semiconductor Manufacturing Company (TSMC) have both announced that their boards of directors have approved a transaction of TSMC Solid State Lighting (TSMC SSL) shares.
Epistar will acquire all shares of TSMC SSL held by TSMC and TSMC's subsidiary TSMC Guang Neng Investment for NT$825 million (US$25.9 million), or NT$1.46 per share. After the transaction, Epistar will own 94% of TSMC SSL, and TSMC will completely exit the company.
TSMC SSL disclosed that it has struggled to reach profitability due to oversupply following the massive expansion of the LED industry in the past several years. As a late entrant, TSMC SSL has also faced difficulties overcoming patent obstacles and establishing sales channels, the company said.
Epistar said its patents are being recognized by major industry players. In addition, the company reached patent cross-licensing agreements with Toyoda Gosei in 2010 and Philips in 2013, and has rapidly expanded production and product application development through acquisitions and strategic alliances.
"I believe that we can reach a win-win-win scenario with TSMC SSL led by Epistar and SSL's present team. Epistar's operations can take off with redoubled strength, the development of the LED industry will accelerate, and consequently TSMC SSL's shareholders and employees will benefit as well," said TSMC SSL chairman Steven Tso in a statement.
Also in the same statement, Epistar chairman Biing-Jye Lee indicated, "We hold an open and positive attitude towards anything that can enhance Epistar's competitiveness and shareholder value, and is beneficial to the development of the LED industry. TSMC SSL's capacity may be far less than Epistar, but by working with TSMC we can be introduced to different thinking, different talent, and different systems from across industries to spark new ideas and strengthen Epistar's future operations."
Less than one month before its investment in TSMC SSL, Epistar completed its takeover of Formosa Epitaxy. Acquiring Formosa Epitaxy has also enabled China-based Sanan Optoelectronics to become a shareholder in Epistar. Sanan previously held a 19.9% stake in Formosa Epitaxy.
