Chi Mei becomes largest shareholder in LED maker Formosa Epitaxy

This article was published by the Taiwan Headlines on May 3, 2006. It reports that Taiwan's Chi Me Group recently acquired a 25-percent stake in Formosa Epitaxy Inc. Now, Chi Mei is the largest shareholder in Taiwan's major local light-emitting diode (LED) maker.

According to industry analysts, both of the top-two TFT-LCD panel makers in Taiwan - AU Optronics Corp. and Chi Mei Optoelectronics Corp. - have been continuously calling up local LED makers in order to search for new lighting sources for their panel products. For example, earlier in 2006, AU Optronics Corp. reinvested in LED maker Highlink Technology Corp. through its subsidiary Wellypower Optronics Co. Ltd. Wellypower is a leading maker of cold cathode fluorescent lamps (CCFL).

More significantly, in order to further consolidate its No.1 position in Taiwan, AU Optronics Corp. recently also announced its plan to merge with Quanta Display Inc., the nation's No.4 TFT-LCD panel maker. According to industry analysts, Chi Mei Optoelectronics Corp. is the first Taiwanese TFT-LCD panel maker to invest in a LED maker.

Such investment mode is expected to enable local LED industry to create a new business model. (In the past, the sales channels of local LED line were controlled by downstream LED packages.) Specifically, instead of a LED packager, Chi Mei chose to directly control an epitaxy maker, which require higher technological level. Such investment mode is expected to make an increasing number of local epitaxy companies become new investment targets of local TFT-LCD panel makers.