Epistar Overhauls Market Strategy

Taipei, March 9, 2010 (CENS)--Epistar Corp., Taiwan's No.1 LED (light emitting diode) chipmaker, recently decided to select LED packagers as its strategic partners, departing from its past practice of passively waiting for packagers' contracts.

Epistar's executives said that based on the existing business model packagers place contracts with chipmakers after they win orders from LED-application suppliers like mobile-phone makers. But, they added, an increasing number of application-product suppliers are appreciating Epistar's chips and have begun designating the company to supply them the chips.

By actively seeking partnership with packagers, Epistar expects revenue to increase noticeably. The company is undertaking several partnership cases, which may significantly boost the company's revenue for this year.

In mainland China, which has emerged as the world's biggest market for LED applications with several ambitious public-work projects, the company will open a US$120 million chip-making venture in collaboration with Lite-On Group of Taiwan and a mainland China household-appliance maker. Lite-On is designated to package the venture's chips on backlight modules for LCD (liquid crystal display) TV makers.

Epistar's board of directors also passed a proposal to invest in an epi-wafer factory planned by foundry United Microelectronics Corp. (UMC) in Shandong Province. Epistar and UMC will each contribute half of the initial capital of US$16 million.

In the initial stage, the factory will be equipped with six metal organic chemical vapor deposition (MOCVD) chambers.

Unlike competitor Cree of the United States, which has expanded into middle stream and downstream sectors of the LED industry, Epistar remains focused on epi-wafer and chip manufacturing. Nevertheless, partnership with packagers is believed to make the company as competitive as Cree, according to industry executives.