LED firms Epistar Corp (晶電) and Lextar Corp (隆達) are planning to restructure under a holding company, which analysts said would help them compete with rivals, through improved technologies and sound financial structure.
Epistar and Lextar on Thursday announced plans to establish a holding company through a share swap, with the firms becoming 100 percent-owned subsidiaries of the new entity, but they would continue to operate independently.
Epistar is one of the nation’s leading suppliers of LED epitaxial wafers and chips, while Lextar makes LED modules and provides downstream packaging services.
“By forming a holding company, Epistar and Lextar are now able to jointly bear the enormous burden of investing in new equipment, in turn lowering their operational risk and helping them gain a foothold in the market for new types of displays,” market researcher TrendForce Corp (集邦科技) said in a note on Friday.
The new holding company would also have a sound financial structure, Yuanta Securities Investment Consulting Co (元大投顧) said in a separate note.
Shares in Epistar on Friday fell 1.71 percent to NT$37.45 in Taipei trading, while Lextar shares rose 5.14 percent to NT$20.45.
The partnership is aimed at enhancing their research and development (R&D) in new technologies such as mini and micro-LEDs, 3D sensing and III-V compound semiconductors (compounds made using elements listed in columns III and V of the periodic table), as well as integrate their resources to improve competitiveness and avoid overlapping investments, the companies said in regulatory filings.
The firms have set Oct. 20 as the share swap date, with one common share of Epistar or Lextar exchanging for 0.5 or 0.275 common shares of the new holding company respectively, their filings show.
Epistar and Lextar would then delist from the Taiwan Stock Exchange, and the new holding company would list on the main exchange with NT$6.86 billion (US$231.29 million) in capital, the filings said.
The firms plan to hold their respective shareholder meetings on Aug. 7 to vote on the deal, which is also pending approval from anti-trust authorities in Taiwan and China, they said.
Epistar has worked with US clients for mini-LED-related products, and its mini-LED backlight products for notebook computers and tablets are expected to start shipping next year, Yuanta said.
Lextar earlier this year worked with LCD panel maker AU Optronics Corp (友達光電) and gaming PC maker Micro-Star International Co (微星科技) to launch the first mini-LED-backlight notebook computer, it said.
With commercial opportunities for micro and mini-LED technologies rising, leading clients such as Apple Inc and Samsung Electronics Co have high hopes for these two emerging display technologies in their products, TrendForce said.
However, as Taiwanese LED manufacturers have over the past few years suffered continuous losses, most of them can no longer afford to expand production capacity on a large scale to meet demand, let alone contend with increasing competition from Chinese LED chipmakers and LED packaging companies, the Taipei-based researcher said.
Through the holding company, Epistar and Lextar would account for 12.43 percent of global LED chip production capacity, TrendForce said, adding that their partnership is expected to create a total vertical integration throughout the entire LED industrial supply chain.
“Given that both companies have been actively investing in mini-LED backlight R&D, the collaboration between Epistar and Lextar will serve to reduce their competition with each other over client orders as mini-LED backlight demand from panel manufacturers and branded end-product [original equipment manufacturers] skyrockets,” TrendForce said.
Jih Sun Securities Investment Consulting Co (日盛投顧) is neutral about the new holding company’s outlook and expects it to have little effect on the overall LED market.
“Although the cooperation between Epistar and Lextar is conducive to the integration of each other’s resources and the integration of upstream and downstream technologies (which is conducive to the development of mini-LED technology), Taiwanese LED companies have in recent years faced price competition from Chinese makers, and the forming of a new holding company still cannot change the competition situation in the low and mid-end LED segments,” Jih Sun said in a note.
Luxury hotel Mandarin Oriental Taipei (文華東方酒店) plans to reopen its guestrooms in December to take advantage of a boom in domestic travel. The reopening would come six months after the five-star facility suspended room operations to cut costs as countries across the region impose border controls to contain the COVID-19 pandemic, diminishing demand for business travel. “We are delighted to share that Mandarin Oriental Taipei will resume room operations on December 1,” the hotel said in a statement yesterday. The hotel in Songshan District (松山) said it would adopt stringent health and safety practices to ensure the well-being of its guests and employees. It
HSBC Bank (Taiwan) Ltd (匯豐台灣商銀) has approved two sustainability-linked loans totaling NT$450 million (US$15.55 million) for Taya Group (大亞集團) and Sinbon Electronics Co (信邦電子), the bank said yesterday, adding that interest rates would fall if the borrowers’ sustainability performance improves. Those marked the first sustainability-linked loans granted by HSBC Taiwan, it said. While HSBC Taiwan has experience providing green loans for the nation’s developers of renewable energy sources to support their projects, the bank began focusing on sustainability-linked loans to meet rising demand from companies in other sectors planning to undertake sustainability programs, it said. “As we reward our clients who reach their
FRONTRUNNER: While the company’s global parent has pledged to lower emissions to 2 tonnes per employee, the local subsidiary has curbed its output to 1.8 tonnes HSBC Bank Taiwan Ltd (?豐台灣商銀) is committed to enhancing corporate social responsibility by cutting carbon emissions, boosting sustainable financing and conducting projects that result in positive social impacts such as wild bird protection, the bank said in an interview in Taipei on Friday. The bank aims to reduce its carbon emissions as its parent company, HSBC Holdings PLC, earlier this month said it targets to reduce emissions in its daily operations and supply chains to net zero by 2030, as well as net zero emissions of its portfolio of customers by 2050, it said. HSBC Taiwan has adopted measures to make its
‘NEW TRAVEL MARKET’: The carrier initially planned to lay off about 8,000 people globally, but after government intervention reduced that to 18 percent of its workforce Cathay Pacific Airways Ltd (國泰航空) would cut 6,000 jobs and close its Cathay Dragon brand, the South China Morning Post reported, as part of a strategic review to combat the unprecedented damage caused by the COVID-19 pandemic. The Hong Kong-based airline is expected to officially announce the plan after the market close today, the newspaper said. It initially planned about 8,000 layoffs globally, but after government intervention reduced that to 18 percent of its total workforce, including about 5,000 jobs in Hong Kong, it said. The company, which posted a HK$9.9 billion (US$1.3 billion) loss in the first half, has for months
RSS