Lextar Electronics Corp of Hsinchu Science Park, Taiwan (a vertically integrated manufacturer of high-brightness LED epitaxy, chips and packages, as well as smart lighting products) and LED chip, lamp and lighting fixture maker Cree Inc of Durham, NC, USA have entered into an agreement whereby Cree will invest about $83m to purchase 83 million Lextar shares at a price of NT$30 per share. Also, the companies will enter into a long-term supply agreement for sapphire-based LED chips, as well as a royalty-bearing license agreement for certain Cree LED chip and component intellectual property. Upon closing of the investment, Cree will own about 13% of Lextar, becoming Lextar’s strategic customer in the lighting market.
Lextar was founded in 2008 and is a subsidiary of TFT-LCD and solar PV manufacturer AU Optronics with nearly 3500 staff at three manufacturing sites in Taiwan and two in China (Suzhou and Xiamen). With applications including LCD backlighting, LED light modules, LED light sources and luminaires, Lextar’s revenue was US$462m in 2013.
"Lextar has established a strong technology position and customer base in the mid- and low-power backlighting and lighting LED segments, while Cree has had outstanding performance in the high-power LED component and lighting markets,” says Lextar’s chairman & CEO Dr David Su. “This new collaboration will increase the competitiveness of our products and technology, enabling both companies continued growth in the LED lighting market,” he believes. “Furthermore, the cross license of LED chip and component intellectual property will afford both Cree and Lextar the benefits from our product and technology development, thereby strengthening our mutual competitiveness in the global LED industry,” he adds.
"Working with Lextar to supply high-quality mid-power LED chips enables Cree to focus its resources on the high-performance, high-power LED chips that differentiate Cree LEDs in the market,” says Cree’s chairman & CEO Chuck Swoboda. “This approach provides the operational and financial flexibility to help Cree achieve the best return on our people and invested capital.”
The agreement has been approved by the boards of directors of both companies, and is targeted to close by the end of fiscal 2014, subject to the approval of Lextar’s shareholders and the Taiwan Investment Committee, as well as other customary closing conditions.
