Epistar expands with Huga investment and Win Semiconductor partnership

June 10, 2010
Epistar, already the largest LED chip manufacturer in Taiwan will take a stake in the second largest manufacturer Huga, and GaAs foundry Win Semiconductor will invest as well.

Apparently driven by the ramping demands for LED backlights in LCD TVs, the leading Taiwanese LED chip maker Epistar will invest in and partner with Huga Optotech. Epistar will become Huga's largest shareholder and in related news gallium arsenide (GaAs) foundry specialist Win Semiconductor will also invest in Huga.

Epistar's board of directors has approved a plan to issue 78 million new shares that it will exchange for 184.08 million Huga shares. Huga is also issuing 100 million new shares at NT $30 (US $0.94) to raise additional capital. Epistar will subscribe to 44.79 million of the new shares with a NT $1.5 billion (US $50 million) cash investment.

The Epistar deal with Huga is scheduled to close July 19. At that time Epistar will hold a 47.88% stake in Huga worth NT $8.6 billion (US $268 million). Epistar hopes the consolidation will boost capacity and efficiency so it can better serve the escalating TV market.

Win Semiconductor, meanwhile, is expected to buy the remaining new shares issued by Huga according to Taiwan semiconductor news specialist DigiTimes. Win Semiconductor chairman Dennis Chen is also the chairman of Huga.

Epistar has previously been active in the acquisition market. In October 2009 Epistar acquired a 19.3% stake in Tekore Co, and earlier acquired a 40.75% stake in Na Ya Photonics (see LEDs Magazine Jan/Feb 2010, p26).

All of the acquisitions provide Epistar with access to additional MOCVD reactors needed for LED production, but which are currently in short supply.