Shareholders of LED chip supplier Formosa Epitaxy Inc (ForEpi, 璨圓光電) yesterday approved the company’s private placement deal with Chinese LED epitaxy maker Sanan Optoelectronics Co (三安光電).
Once approved by the Investment Commission, the private placement is expected to permit Sanan to become a major shareholder in ForEpi and help the Taiwanese firm expand its business in China, the company said.
ForEpi said it planned to issue a maximum of 120 million shares, or 19.9 percent of its issued capital shares, at a tentative price of NT$19.6 each to Sanan.
The Taiwanese firm expects the collaboration to help it enhance global competitiveness and cut costs, the Central News Agency quoted ForEpi chairman Chien Fen-ren (簡奉任) as saying.
ForEpi reported a net loss of NT$594.77 million (US$19.86 million), or NT$1.25 per share, last year compared with NT$191.08 million, or NT$0.4 per share, in the previous year on an oversupply of chips used in LED backlight products and falling LCD TV prices.
“This year ForEpi is shifting focus to LED products and other LED applications used in automobiles, in a bid to improve the company’s profitability,” the Chinese-language United Evening News quoted Chien as saying at the company’s annual general meeting.
Chien forecast ForEpi’s sales and net profit would start to achieve significant growth from the next quarter because of increased capacity.
On the back of the government’s energy-saving policies and the continued fall in the prices of LED products, shipments are likely to continue increasing this year, he said.