China LED lighting factory


Epistar Acquires Optodisc Factory to Expand AlInGaP LED Production

Leading Taiwanese LED chip manufacturer Epistar acquired bankrupt Taiwanese blue-ray CD and LaserDisc manufacturer Optodisc factory for NT $836 million, according to a Chinese-language Commercial Times report. Epistar plans to expand AlInGaP and InGaN LED production at the new factory site.

The company's newly acquired factory is expected to be initiated in August 2014, and will increase its AlInGaP LED production capacity by 10 percent in third quarter this year. The new factory is a five to ten minute drive from Epistar’s number three factory. The company will be organizing the new factory at the end of this year, moving personnel and offices from factory two and three to the new site. Freed up space in factory three will be used to install equipment for AlInGaP LED production capacity expansions.

According to the Taiwanese manufacturer, outside of China, the major three AlInGaP LED manufacturers are Epistar, Osram, and Philips. The other two companies have no plans to expand AlInGaP LED production capacity at the moment. In the AlInGaP LED sector, Epistar has a lion share of 45 percent to 50 percent market share. The Taiwanese manufacturer is expanding production capacity because of rising demands for outdoor LED displays. Other applications requiring LED components include automotive lighting components for headlamps, signal lights, brake lights, and even long distance infrared (IR) vision equipment. All these market demands have led to AlInGaP LED shortages this year.

The stably growing AlInGaP LED market requires patented technology, high quality and reliability standards. Although, AlInGaP LEDs only make up 25 percent to 30 percent of Epistar’s revenue, these products contribute to more than half of the company’s profits. AlInGaP LED revenues have surpassed InGaN LED chips, another major revenue source for Epistar. The expanded AlInGaP LED production capacity is expected to further boost the company’s profitability.

The company’s ultra-bright AlInGaP LED products have reached a monthly production capacity of 1.4 billion pieces, while high brightness products production capacity are now about 4 billion to 5 billion pieces. Epistar factories have reached full utilization for both products, and the company plans to expand production capacity by 10 percent. Production capacity is expected to be increased in third quarter of 2014.

Moreover, Epistar will also be expanding InGaN LED production capacity at the newly acquired factory. Overt blue LED expansions during 2010 to 2011 caused an oversupply situation, but reduced production capacity over the last two to three years plus growing LED lighting demands have led to tightened supplies, said Epistar.

Epistar’s factories in Taiwan and China have reached full utilization rates, including subsidiary Huga Optotech. The company plans to steadily scale up production by adding 12 MOCVDs in Taiwan factories, and 30 to 35 MOCVDs in China.

Optodisc Factory declared insolvency on October 2013, and was going to sell the factory for at least NT $1.31 billion in March this year. Real estate agents noted the auction base price was too high at the time.