Trade Resources Industry Views Taiwan LED Epitaxial Wafer and Chip Maker Formosa Epitaxy with China Sanan Optoelectronics

Taiwan LED Epitaxial Wafer and Chip Maker Formosa Epitaxy with China Sanan Optoelectronics

Taiwan-based LED epitaxial wafer and chip maker Formosa Epitaxy on November 12 announced the issuance of up to 120 million new shares specifically for private placement, with China-based maker Sanan Optoelectronics to be the target.

The total value for the issuance will be up to NT$2.352 billion (US$80.4 million) and 120 million new shares are equivalent to a 19.95% stake after expansion of paid-in capital, Formosa Epitaxy pointed out. Sanan will have its wholly owned subsidiary in Xiamen, southeastern China, to subscribe for the new shares, Formosa Epitaxy indicated.

Formosa Epitaxy expects the investment by Sanan to help it tap the China market, company spokesperson Grath Fu said. As Formosa Epitaxy had total orders for LED chips used in backlight units (BLUs) in excess of available production capacity in the second and third quarters of 2012, Sanan's production capacity can support Formosa Epitaxy through the investment, Fu indicated.

Currently, Formosa Epitaxy has 58 MOCVD sets and nearly 100 ones in total including MOCVD equipment at its subsidiary in Yangzhou, eastern China, while Sanan has nearly 200 MOCVD sets. Formosa Epitaxy does not conflict with Sanan in client base, for the former has international vendors as major clients and the latter focuses on the China market, Formosa Epitaxy pointed out. Currently, the China market accounts for less than 10% of its total revenues, Formosa Epitaxy indicated.

Due to larger than originally estimated demand for LED chips used in BLUs, Formosa Epitaxy expects sequential decrease in fourth-quarter 2012 revenues to shrink from originally estimated 20% to about 10%.

Source: http://www.digitimes.com/news/a20121112PD214.html
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China-Based Sanan Optoelectronics to Invest in Taiwan LED Maker Formosa Epitaxy
Topics: Lighting