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Epistar to Invest in TSMC Solid State Lighting

Source:Smooth Lighting Tech Co.,Ltd      Date:2014-12-29

Leading Taiwanese LED chip manufacturer Epistar is planning another merger to complete its white LED portfolio, according to a Chinese-language report by China Times.

Market rumors over the last two weeks have noted Epistar will be investing in TSMC wholly owned subsidiary TSMC Solid State Lighting, but the two Taiwanese companies have not responded to these market rumors.

TSMC Solid State Lighting (SSL) was founded in August 2011, with a registered investment capital of NT $11 billion (US $350 million). In reality, the company’s capital is about half of the above figure at NT $6.01 billion. Industry insiders often view the company using its strong background in semiconductors to make high-end LED chips. The manufacturer features production of flip chip LEDs and has 2 MOCVDs.

TSMC Chairman Morris Chang even announced TSMC SSL will be the company’s major trump card in the future at a company sports event in 2013. As the LED lighting industry sinks further into price wars, TSMC SSL LED chips have fallen behind in performance and pricing. TSMC SSL partners have described its products as having “low cost/performance ratio.”

With lower than expected performances, TSMC SSl former President Jacob Tarn was removed from post, and there was a turnover in other management positions. There were even market rumors that TSMC SSL undergoing a cost down, and some estimated AOT would take over. Recent market rumors among downstream LED manufacturers, though, point to Epistar as the possible investment candidate in the ailing TSMC SSL.

TSMC has few MOCVDs, but it has many white LED patents, and has signed patent licenses with U.S. manufacturers.

Yet, TSMC SSL stocks have relatively high value. The company might sell its LED package equipment first. There were also market rumors that AOT might restructure company assets, and even lower company share value to NT $1 billion. After clearing company shares, the two companies can invest again, which will limit Epistar’s investments. Still, it would be equivalent to TSMC accepting losses in LED lighting, and further observations are required to determine high ranking officials perspective on LED lighting.

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