Epistar merger with FOREPI to ease LED chip price falls

The trend of acquisitions within the LED industry will continue in 2014, observed LEDinside, a research division of TrendForce. Epistar’s merger with FOREPI will improve production capacity, cost management, as well as client and product integration. After the merge, the two companies will also be able to jointly resist market threats from Chinese LED chip manufacturer San’an Optoelectronics (San’anOpto). “This merger will substantially drive up Epistar’s MOCVD equipment installation to 436 sets, and position the company well ahead of competitors,” said LEDinside Associate Manager Joanne Wu. After Epistar obtains FOREPI, the company wafer production capacity will increase to around 1,200Kpcs/M, and meet production expansion targets for this year. Chinese manufacturer San’an Opto has installed around 160 MOCVD equipments and intends to add another 200 sets by 2018. The LED chip market is becoming an oligopoly, where the trend of larger manufacturers becoming bigger has become increasingly evident. The merger will optimize Epistar’s economic of scale and give it more bargaining power when procuring upstream raw materials, said Wu. Additionally, in regards to the Taiwanese company’s international developments, product integration and integration with Korean supply chain will stabilize market global chip market prices, and help the company avoid cutthroat market competition.