Epistar Acquires FOREPI to Solve Supply Shortage Issues
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Top Taiwanese LED chip manufacturers Epistar and FOREPI have officially merged, the two companies announced at a joint press conference held in Taipei, Taiwan on June 30, 2014. The two companies announced the merger will integrate the two companies resources, production capacity, and staff to meet market demands and improve revenue performances.

The acquisition will be carried out through conversion of shares, where Epistar and FOREPI issued shares will be exchanged at a rate of about 1:3.45. After the exchange, FOREPI will become a 100 percent fully owned subsidy of Epistar, and will be delisted from the Taiwan bourse. The exchange of shares is temporarily scheduled to take place on Dec. 30, 2014.

Epistar will have large supply shortages in the second half of 2014, with already a 35 percent production capacity gap, the company will be facing further production challenges during the conventional industry peak season in  fourth quarter this year, said the company Spokesperson Rider Chang. Taking into consideration strong LED lighting and backlight growth in the future, the aim of Epistar’s acquisition of FOREPI is to expand production capacity to serve more clients. The merger not only will solve the company’s supply and demand issue in 2014, it also takes into consideration 2015 and future demands.

The acquisition will not only expand production capacity, it will also fully integrate the two companies’ resources. Epistar currently has 383 MOCVD equipments, while FOREPI has 103. After the merger, total MOCVD equipments will be up to 500. Moreover, the two companies’ collection of patents will be beneficial to future technology developments. Epistar currently has 2,600 patents and FOREPI 400.

In terms of R&D and human resources, both companies are upstream manufacturers with many overlapping R&D projects, noted Chang. Taiwan’s LED industry R&D staff will be more concentrated after the merger, which will in turn advance LED technology levels, while reducing duplicated costs. Overall, the Taiwan LED industry will become more efficient.

The two companies will continue to integrate sales management. FOREPI operations will remain independent. Epistar has adopted an open attitude to company mergers, and will not limit cooperation to certain regions, explained Chang. He concluded, Epistar has not ruled out the possibilities of acquiring other companies in the future, as long as the two companies share similar concepts, are willing to cooperate, and capable of creating benefits to spur future LED industry developments.

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