Formosa Epitaxy, a Taiwan-based maker of LED chips, plans to issue up to 150 million new shares to raise an additional capital of about NT$6.4 billion US$162.6 million to expand capacity, according to the company. The fund-raising can be via a public offering or private placement in Taiwan or through issues of GDRs global depositary receipts and convertible bonds, with these alternatives to be discussed at a shareholders meeting on June 29.
Formosa Epitaxy plans to expand production capacities in Taiwan and China from 43 MOCVD sets to 81 by the end of 2010. Of the 38 new machines, 13 will be in Taiwan and 25 in China, according to updates from company sources. Another 40 sets will be added throughout 2011.
Formosa Epitaxy began shipping to LED lighting device clients in Japan in the second quarter, with initial monthly shipments of a few thousand units, but volumes are expected to increase substantially in the second half, the sources said, noting that shipments include 3W and 7W LED light bulbs and light strips.
For South Korea's LED lighting market, the company is shipping high-brightness LED chips to chip packaging and module manufacturing partners in the country, the sources indicated. The company also has plans to enter the US and Europe markets by the fourth quarter of 2011.
With the China government rumored to be modifying its LED street lamp policies from direct subsidization to reimbursing companies at a later date based on the amount of money saved annually from implementing LEDs, Formosa Epitaxy reportedly plans to retreat from such projects in Yangzhou, China.
The company pointed out that the LED street lamp market is a good opportunity despite uncertainties surrounding subsidization. As long as it is beneficial to the company, it will continue to consider future developments.
