Epistar Invests US$14.95M in Malaysian LED Package Company

Quotes/ Perspectives from LEDinside: 
“Epistar has set many investment precedents, including in LED package manufacturers Edison Opto, Prolight Opto and others, since it is not involved in the LED package manufacturing,” said Chu. “This is mainly because future technology trends in the LED industry will require higher levels of integration.”

Leading Taiwanese LED manufacturer Epistar has acquired nearly 10% stake in Malaysian LED manufacturer Dominant OptoTechnologies, according to a latest report from Chinese-language media UDN.

The Taiwanese manufacturer investment of NT$ 490 million (US $14.95 million) in Dominant Opto Technologies (Dominant) is expected to expand Epistar’s automotive LED chip market, and enable it to acquire LED die orders from U.S. and European car makers.

Dominant is a Malaysian LED manufacturer, and one of Epistar’s most important clients, said Rider Chang, the Vice President and Spokesperson for Epistar.

The Malyasian LED chip packager is a major European and American automotive lighting supplier. The company’s product portfolio includes LEDs for automotive dashboard backlight, electric windows, signal lights on car gear sticks, exterior automotive signal lights, stop lights and has future plans of developing headlights.

European and U.S. automotive manufacturers have asked Dominant to secure LED die supply source, so it will not affect the company’s shipment volume. These demands spurred the recent investment partnership with Epistar. The partnership is expected to increase the Taiwanese company’s orders. According to the report, Dominant has received orders from U.S. and European car manufacturers, and will be allocating a large LED die order to Epistar after signing the partnership agreement.

Commenting on Epistar’s recent investment in Dominant, LEDinside Research Director Roger Chu noted the strategy was in line with the Taiwanese company’s long term virtual vertical integration strategy.

“Epistar has set many investment precedents, including in LED package manufacturers Edison Opto, Prolight Opto and others, since it is not involved in the LED package manufacturing,” said Chu. “This is mainly because future technology trends in the LED industry will require higher levels of integration.”

Moreover, the strategy indicates Epistar’s downstream integration. “Similar to Epistar’s investment in Edison Opto, the aim here is to bundle up its supply chain with its clients to stabilize and solidify its relationship with clients and LED package manufacturers,” added Chu. “This investment strategy can also prevent other competitors to contend for its clients.” 

(Additional Edits: Judy Lin, Chief Editor, LEDinside)

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