Epistar Corp., Taiwan’s largest LED chip manufacturer, has decided to spend US$600 million to set up a LED production factory in Jiangsu, China, according to an article on Taiwan Economic News.

Due to growing popularity of LED backlight used in notebook PCs and LCD TVs, Epistar is actively planning to expand capacity to meet increasing demand for LED chips. 30 sets of MOCVD equipment will be purchased in the first stage of the construction, and will go into production in the first quarter of 2011, the company indicated. That will represent an added 40% to the current output of the company. The firm now has one plant each operational in Fujian and Liaoning Provinces, according to the article.

Epistar also plans to enhance cooperation with Taiwan’s downstream LED companies such as Lite-On Technology and Everlight Electronics to form an integral supply chain of LED applications in China, according to the article.