LED chip supplier Formosa Epitaxy Inc (璨圓光電) said yesterday it planned to issue new common shares to raise funds from a Chinese investor via a private placement.
The Longtan Township (龍潭), Taoyuan County-based company said its board approved the management team’s proposal to sell as many as 120 million new shares at NT$19.6 per share to China’s Sanan Optoelectronics Co (三安光電).
Through the NT$2.35 billion (US$80.8 million) deal, Sanan Optoelectronics will acquire 19.9 percent of Formosa Epitaxy via its 100-percent owned Xiamen subsidiary and will become the firm’s largest institutional shareholder, ahead of Japan’s Mitsui & Co, which holds 15 percent.
The two sides will today formally sign a share subscription agreement, to take effect after gaining approval from their respective shareholders, Formosa Epitaxy said in a filing to the Taiwan Stock Exchange. The transaction is still subject to regulatory approval.
The firm is scheduled to hold a special shareholders’ meeting on Jan. 3 to seek approval for the sale.
The global LED industry grown rapidly in recent years as LEDs gain use in wide variety of applications, such as handset keypads, monitors and TV backlights. General lighting applications, such as street lighting, are also expected to support the growth of the LED industry. As an example, China has plans to install 2 million LED streetlights between 2010 and this year in 50 first-tier cities.
Formosa Epitaxy, the second largest LED chipmaker in Taiwan, said the new capital from Sanan Optoelectronics, which is primarily engaged in full-color high-brightness LED wafer and chip manufacturing, would help strengthen its financial position, expand its business scale and enhance its competitiveness, according to the filing.
The announcement came in the wake of market speculation that Taiwanese LED companies were in talks with their Chinese peers, including Sanan Optoelectronics, Hangzhou Silan Azure Co (杭州士蘭明芯科技) and BOE Technology Group Co (京東方), about potential partnerships, a move which analysts said would help re-energize Taiwan’s LED firms in view of the strong potential of the LED lighting market in China.
However, Taiwanese firms would face challenges from such cooperation in the long term, analysts said, because Chinese makers have been quickly upgrading their technology through recruiting engineers from Taiwan-based firms and expanding production capacity.
Moreover, Chinese firms are used to obtaining key technologies and production know-how without sharing profits with their Taiwanese peers, Fubon Securities Investment Services Co (富邦投顧) analyst Lewis Liu (劉立中) said in a Sept. 7 note.
Shares in Formosa Epitaxy moved up by the maximum 7 percent daily limit to close at NT$20.95 yesterday on the Taiwan Stock Exchange before the private placement announcement was made, outperforming the benchmark TAIEX, which was down 0.35 percent.
Trading of Sanan Optoelectronics shares, which closed at 13.1 yuan on Friday, was halted in Shanghai yesterday.
In the September quarter, Formosa Epitaxy reported a net loss of NT$33.67 million, or NT$0.07 per share, on revenue of NT$1.35 billion and a gross margin of 7.09 percent.
In the first three quarters of the year, its net loss was NT$168.68 million, or NT$0.35 per share, with revenue of NT$3.58 billion and gross margin of 3.63 percent, company data showed.
France cannot afford to ignore the third credit-rating reduction in less than a year, French Minister of Finance Roland Lescure said. “Three agencies have downgraded us and we can’t ignore this cloud,” he told Franceinfo on Saturday, speaking just hours after S&P lowered his country’s credit rating to “A+” from “AA-” in an unscheduled move. “Fundamentally, it’s an additional cloud to a weather forecast that was already pretty gray. It’s a call for lucidity and responsibility,” he said, adding that this is “a call to be serious.” The credit assessor’s move means France has lost its double-A rating at two of the
Jensen Huang (黃仁勳), founder and CEO of US-based artificial intelligence chip designer Nvidia Corp and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) on Friday celebrated the first Nvidia Blackwell wafer produced on US soil. Huang visited TSMC’s advanced wafer fab in the US state of Arizona and joined the Taiwanese chipmaker’s executives to witness the efforts to “build the infrastructure that powers the world’s AI factories, right here in America,” Nvidia said in a statement. At the event, Huang joined Y.L. Wang (王英郎), vice president of operations at TSMC, in signing their names on the Blackwell wafer to
AI BOOST: Although Taiwan’s reliance on Chinese rare earth elements is limited, it could face indirect impacts from supply issues and price volatility, an economist said DBS Bank Ltd (星展銀行) has sharply raised its forecast for Taiwan’s economic growth this year to 5.6 percent, citing stronger-than-expected exports and investment linked to artificial intelligence (AI), as it said that the current momentum could peak soon. The acceleration of the global AI race has fueled a surge in Taiwan’s AI-related capital spending and exports of information and communications technology (ICT) products, which have been key drivers of growth this year. “We have revised our GDP forecast for Taiwan upward to 5.6 percent from 4 percent, an upgrade that mainly reflects stronger-than-expected AI-related exports and investment in the third
RARE EARTHS: The call between the US Treasury Secretary and his Chinese counterpart came as Washington sought to rally G7 partners in response to China’s export controls China and the US on Saturday agreed to conduct another round of trade negotiations in the coming week, as the world’s two biggest economies seek to avoid another damaging tit-for-tat tariff battle. Beijing last week announced sweeping controls on the critical rare earths industry, prompting US President Donald Trump to threaten 100 percent tariffs on imports from China in retaliation. Trump had also threatened to cancel his expected meeting with Chinese President Xi Jinping (習近平) in South Korea later this month on the sidelines of the APEC summit. In the latest indication of efforts to resolve their dispute, Chinese state media reported that
RSS