Chimei Optoelectronics has gone out of business leaving behind NTD 5.6 billion in debt. The company's creditor bank has been pursuing the company to obtain their financial claim but has yet to hear anything from the company.
Chimei used to be a superior company in the Taiwanese LED world. Even with two rich shareholders like Innolux Corportation and Chimei Cooperation, the company still went out of business. The main reason comes from the fact that solid capital and high government subsidy plans in China for the LED market have made Chinese manufacturers a strong competitor with low prices. Also, due to this abundance of competition slowing down in China, the same type of situation has now spread to Taiwan.
With shareholder Chimei Cooperation fading out the technology industry, Innolux not using Chimei Optoelectronic made chips, and other LED companies refusal for corporate acquisition, the bank is in crisis for obtaining the NTD 5.6 billion in financial claim.
Chimei Optoelectronics bankruptcy is a situation Taiwanese LED manufacturers refuse to acknowledge, but it is actually a good development for the entire LED industry. It will cause the supply and demand to become more balanced. That being said, the creditor bank for Chimei suffers most from the situation. Also, suppliers for Chimei Optoelectronis, such as sapphire substrate manufacturers, might also produce bad debts.
Chimei Optoelectronics has around 40 MOCVD systems. In the LED industry, companies like Formosa Epitaxy Incorporation, GENESIS Photonics, and others all produce blue light LED epitaxial and die.
Before 2011, all chips produced by Chimei had good luminous efficacy, supplying companies like big packing manufacturer Everlight. LED epitaxy manufacturer Epistar even considered merging with Chimei during their horizontal integration.
Chimei's creditor bank points out that Chimei Optoelecontrics not only shows an open window in management, but they have also returned 100% of China's Foshan investment and have transmitted all reassignment request by the chairman and general manager.
