Tue, Sep 02, 2014 - Page 13 News List

Epistar buys Epitaxy to grow production capacity

Staff writer, with CNA

Epistar Corp (晶電), one of Taiwan’s leading LED chip suppliers, said yesterday that a deal to acquire a smaller Taiwanese rival — Formosa Epitaxy Inc (ForEpi, 璨圓光電) — is aimed at expanding its production capacity to meet an expected rise in demand next year.

During a special general meeting in which Epistar’s shareholders approved the deal, chairman Lee Bing-jye (李秉傑) said his company is keen to raise its economy of scale, as a larger-sized supplier in the global LED industry could win a larger market share.

Formosa Epitaxy shareholders also approved the deal in a separate shareholder meeting.

Lee said a larger Epistar would be able to meet the estimated rise in demand next year, in particular in the second quarter, when seasonal demand should boost shipments.

In late June, Epistar announced that it would acquire Formosa Epitaxy through a share swap in which Epistar is set to exchange one of its common shares for 3.44 Formosa Epitaxy shares.

Epistar currently ranks as the world’s largest aluminum-gallium-indium-phosphide (AlGalnP) epitaxial wafer and chip supplier and the second-largest indium-gallium-nitride (InGaN) epitaxial wafer and chipmaker.

After the acquisition, Epistar would become the biggest vendor of both LED products and is set to take a 30 to 40 percent share of the global LED epitaxial wafer and chip market.

The company expects the acquisition to be completed by the end of this year.

Lee said that as the global LED industry is on the road to recovery, Epistar has to position itself well to take advantage of the growth by raising its production capacity, and the deal is part of its efforts to launch new products and boost Epistar’s supply.

Lee said that as production expanded, Epistar would need a larger workforce and the acquisition would allow the company to make better use of Formosa Exitaxy’s experienced staff.

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