Epistar Corp (晶電), the nation’s biggest LED chipmaker, yesterday said it plans to shut down its LED chip production lines in Taoyuan to cut costs and stem losses.
It is the company’s second streamlining measure aimed at coping with industry oversupply and plunging prices, since its board in March decided to sell a Hsinchu plant and sell and shutter some of subsidiary Formosa Epitaxy Inc’s (燦圓光電) factories to reduce costs and revitalize its assets.
Epistar, headquartered in Hsinchu, said it plans to close production lines operated by Formosa Epitaxy due to low equipment utilization and high manufacturing costs.
Epistar plans to allocate manufacturing equipment at Formosa Epitaxy’s production lines in Taoyuan to other manufacturing sites after demand picks up, company spokesman Rider Chang (張世賢) said yesterday in a filing with the Taiwan Stock Exchange.
“The company has to speed up cost savings in order to return to profit,” Chang said.
The company posted NT$1.44 billion (US$44.1 million) in losses for last quarter, a slight improvement over the NT$1.96 billion in losses in the fourth quarter of last year.
The company did not say how many workers would be affected by the latest factory closure.
About 90 of the factory’s 100 employees are to be laid off, the Chinese-language Apple Daily reported.
Chang could not be reached for comment as of press time last night.
In yesterday’s statement, Chang said the company would help employees relocate to other departments or encourage them to work for the company’s subsidiaries.
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