Formosa Epitaxy Licensed by U.S. Client to Make High Power LED

Taipei, April 22, 2008 (CENS)--The Formosa Epitaxy Inc., a Taiwanese maker of LED (light-emitting diode) chips, has obtained a U.S.-based client's license for making a patented high-power LED as Taiwan's exclusive maker of the product in the sector, according to company sources.

Such a high-power LED is mainly applied to LED lightings and protected by patents in the U.S. Through the license, Formosa Epitaxy can effectively improve brightness of its existing LED products and will attract more clients to place orders with it in the future.

Formosa Epitaxy noted that it has enjoyed smooth influx of orders in April and, after installing two new production lines of MOCVD (metal organic chemical vapor deposition) technique, projects its April sales to grow over 10% from March to hit a record high.

Compared with conventional blue LED, in which positive and negative poles are built at the same side, the patented high-power LED owned by U.S.'s Cree has its positive pole at the upper side and negative pole at the lower inside. Such a design improves efficiency and thermal dissipation of 1W and above high-power LEDs. Formosa Epitaxy has inked a contract with the U.S. client for the license.

Formosa Epitaxy indicated that to meet clients' demand, it has moved to heavily expand its capacity this year and plans to double its MOCVD machines to 35 units next year from 18 units last year. This will sharply boost the firm's single-month capacity of expitaxy wafer to between 45,000 and 48,000 units from the existing 25,000 units, and expand the monthly capacity of LED chips to 700 million units from current 330 million units. With continuous efforts on expanding production capacity, the firm is very likely to challenge single-month revenue of NT$200 million in June.

Formosa Epitaxy succeeded in maintaining its gross profit rate for the first quarter of this year at between 25% and 30%, due mainly to its strong concentration on highly profitable product lines, such as LED backlights, which contributed 71% to the total sales in the quarter.

In high-power LEDs, sales of the products accounted for about 15% of Formosa Epitaxy's sales revenue in the first quarter and the figure is estimated to reach 20% in the second quarter, thanks to growing demand for applications of street lights and decorative lights in China and Taiwan.