Hon Hai appears to become major financer of Taiwanese LED startups

Hon Hai Precision Industry Co., Ltd., currently Taiwan's No.1 manufacturing conglomerate by revenue, appears to become a major financer of Taiwanese light-emitting diode (LED) startups because of its plans to plow capital into many of the makers through subsidiaries.

The company's semiconductor-equipment subsidiary Foxsemicon Integrated Technology Inc. will likely acquire all of the shares in an NT$300 million (US$9 million at US$1:NT$33) capital-increase project launched by High Power Opto Inc., which was founded by K.S. Huang, the former chairman of LED maker United Epitaxy Co., Ltd.

Also, Foxsemicon is reported to likely put money into Advanced Optoelectronic Technology Inc. in the latter's private-equity subscription project to raise NT$1.2 billion (US$36 million).

Innolux Display Corp., Hon Hai's liquid-crystal display (LCD) panel affiliate, is reported to buy a stake in LED backlight-module supplier Unity Opto Technology Co., Ltd., which fills the majority of the demands by Innolux's seven-inch panels. The panel maker has increasingly used LED module to replace cold cathode fluorescent lamp as backlight in its panels.

Hon Hai plans to muscle into LED area by systemically acquiring packagers excluding Lite-On Technology Corp. and Everlight Electronics Co., Ltd. The company's advantage in entering the field is its long-established mold-building and thermal-dissipation capabilities.

Taiwanese industry watchers pointed out that Hon Hai's involvement in LED industry would help accelerate the development of world's LED-lighting industry thanks to its abundant resources. They estimated the company's involvement would help pare down the cost of an LED MR16 lamp to around NT$200 (US$6) from current NT$300 (US$9).

Market-research organization Strategies Unlimited of the United States projected LED lighting market to post compound annual growth rate of 40% worldwide between 2002 and 2008. The organization estimated lighting would account for 70% of LED applications in 2010, with the remaining portion filled by handsets.

source & copyright: CENS