19 June 2020
Epistar and Lextar partnering to seize commercial opportunities in micro- and mini-LEDs
Regarding the plan announced by Taiwan-based LED makers Epistar and Lextar to jointly establish a holding company through share conversion, TrendForce’s LEDinside research division comments that the two companies’ partnership should enable them to seize commercial opportunities in micro- and mini-LEDs.
Epistar and Lextar to avoid overlapping investments by sharing production capacities
With the rise of micro-LED and mini-LED commercial opportunities, leading manufacturers such as Apple and Samsung are placing high hopes in the future of these two emerging display technologies and forecasting high demand for micro/mini-LED suppliers’ production capacities. However, as Taiwanese LED makers have suffered continuous financial losses over the past few years, most of them can no longer afford to expand their production capacity on a large scale to meet demands from end-product brands.
Furthermore, the recent surge in capital expenditure (CapEx) by Chinese LED chip makers and LED packaging companies, as well as their partnership with domestic panel manufacturers, has alarmed Taiwanese LED companies to the hypercompetitive state of the LED industry.
By forming a holding company, Epistar and Lextar are now able to jointly bear the enormous burden of investing in new equipment, in turn lowering their operational risk and helping them gain a foothold in the market for new types of displays, reckons TrendForce.
TrendForce estimates that, after the formation of the holding company, Epistar and Lextar will collectively account for 12.43% of global LED chip production capacity.
Supply-chain integration allows Epistar and Lextar to collectively pursue client orders
Epistar’s production capacity is primarily focused on LED epitaxy and LED chip fabrication, whereas Lextar specializes in LED packaging and modules. The partnership between the two firms will result in vertical integration throughout the entire LED industrial supply chain. Given that both companies have been actively involved in mini-LED backlight R&D, the collaboration between Epistar and Lextar should serve to reduce their competition with each other over client orders as mini-LED backlight demand from panel manufacturers and branded end-product OEMs skyrockets, it is reckoned.