San’an to Rival Epistar After Ending ‘Frenemy’ Relationship

Epistar's major stockholder Xiamen San’an Optoelectronics announced on September 27 that it has sold all of its 3.05% share of Epistar. San’an lately sold 33.306 million shares of Epistar in a block trade, gaining NTD 1.244 billion (USD 41.01 million) after deducting the transaction fee.

San’an Opto originally possessed a 3.05% stake of Epistar. The block trade ended the cross-strait financial bond between the two LED giants, terminated their frenemy relationship, and instead started a head-to-head competition. It signaled that San’an's strategy to ruling over the cross-strait LED industries has come to a halt, while Epistar is likely to retain its leading position in Taiwan.

San'an Optoelectrnoics (top); Epistar (bottom) 

San’an Opto ranked the fourth largest stockholder of Epistar, following the top three ones including Taiwan-based life insurance companies and foreign investors. Epistar expressed that they will not comment on any stock selling behavior from stockholders for their financial management. Besides, Epistar was not informed in advance that San’an Opto would sell Epistar's stocks. Yet, the Taiwanese LED maker holds a positive attitude towards it, explaining that the uncertainty of San’an's strategies to access Epistar's technology will no longer exist. The two LED manufacturers are now confirmed to be rivals.

"The reason behind the separation is an essential difference between both LED giants’ strategic planning,” said Roger Chu, Research Director at LEDinside. “San’an Opto attempts to continue its capacity expansion, while Epistar prefers keeping profits.”

The capacity of San’an Opto is currently the largest around the globe. Aware of that other Chinese LED manufacturers are by turning enlarging their production as well, San’an determined to keep scaling up its capacity to secure its leading position at the supply end, according to Chu.

Chu continued, “Epistar, on the other, chooses to keep profits at a certain level and focuses more on niche markets such as automotive lighting and horticultural lighting, and new optical applications such as VCSEL. The Taiwan-based company is eyeing more advanced applications to make itself grow with the market trend. ”

Based on different focuses, San’an Opto and Epistar eventually went their separate ways.

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