HC Semitek announced Tuesday night that it will be acquiring 100% of Crystaland shares for RMB 1.08 billion (US $170 million), according to a Chinese-language Securities Times report.

Following the transaction, Crystaland will become a wholly owned subsidiary of HC Semitek.

Crystaland was founded by Kang Wu, Longyu Wu, Longju Wu, Cheng Wu, Jia Wu, and Yu Wu. The company’s major businesses include sapphire ingot, crystal material R&D, and sapphire polishing. The company’s products are mostly sold in the upstream LED market. According to the company announcement, Crystaland’s revenues from 2-inch sapphire substrates, 4-inch sapphire substrates, sapphire windows, LED tube lights, and other products amounted to RMB 187 million in 2014. The company’s gross margin reached 32.56% that year.

After completing the Crystaland acquisition transaction, HC Semitek’s businesses will encompass LED chip manufacturing, upstream sapphire ingot and substrate production and other applications. The company will be able to lower its sapphire procurement costs and many other expenditures, while improving its core competitiveness and profitability. Still there are differences in the two companies procurement procedure, production, sales, and management. There are still uncertainties as to whether the two companies will be able to smoothly integrate their resources, business strategies, and management within a short period of time. There are no guarantees that the two companies will share the same goals after integration, and much needs to be done to prevent changes in management, loss of engineers and technicians, and protect the two companies from negative impact from the integration process.