Nikkiso and FPCC's UVC LED Joint Venture in Taiwan to Scale up Production in 2018

Formosa Petrochemical Corporation (FPCC) announced Thursday about a new investment partnership with Japanese UV LED manufacturer Nikkiso to expand applications in medical devices, reported Taiwanese media UDN.

The two companies will be jointly investing in the world’s first UVC LED fab for mass production with FPCC holding a 49% stake in the company and Nikkiso the remaining 51%.

Initially, FPCC will be the main investor and will provide a capital of 4 billion Japanese Yen (US $35.28 million) in the joint venture, while Nikkiso will mostly be the technology provider. The two companies will each hold 50% of board member seats, which gives both companies equal votes and negotiating power in potential future acquisitions and mergers.

Nikkiso and Taiwan’s largest plastic manufacturer FPCC aim to establish a fully integrated UV-LED factory, from EPI-wafer, package testing, to the final end product. However, since UV LED is an immature and relatively new technology, most LED companies investing in the technology still lack mass production capacity. Hence, companies will take a gradual approach in their joint venture.

Additionally, with many companies investing in UV LED R&D, FPCC and Nikkiso are also evaluating acquiring other companies in the future to accelerate forming a comprehensive supply chain.

Nikkiso has a laboratory in Japan will be shipping EPI-wafers in the future, which will be turned to FPCC subsidiary Formosa Advanced Technologies for packaging tests. FPCC will also be involved in the end product UV LED design process, following expanded manufacturing capacities, Nikkiso will also build its first EPI-wafer fab in Taiwan to form a comprehensive vertically integrated manufacturing site.

The joint venture to be established in Taiwan will specialize in the UVC LED production for sanitization, residential sanitization and other medical devices. Technology focus of the two companies will be in the UVB and UVC LED applications, which have a higher technology entry level in water treatment and medical sanitization applications than UVA devices commonly found in curing and air purifying applications.

Partnership rumors emerged towards the end of 2016, and the companies projected mass production as early as 2018. The UVC LED joint venture’s annual production capacity will approximately amount to 12 million pieces, and generate an annual income of 30 billion Japanese Yen by 2020.

According to FPCC, Nikkiso approached the company and made the initial partnership proposal. Nikkiso’s UVC LED technology is very advanced and based on research from Nobel Prize in Physics laureate Amano Hiroshi. At one point the Japanese UV LED company received financial backing from the government. Fluorescent lamps are also capable of killing germs, but has a shorter lifespan than LED lights.FPCC optimistic outlook of UV LED commercialization was the main reason behind its decision to invest in the technology.

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