Business News | Company News | Partnerships | Jun 19, 2020

Epistar and Lextar to Jointly Establish A New Holding Company

Epistar Corporation ("Epistar" or the "Company") (TAIEX: 2448) and Lextar Electronics Corp. ("Lextar" or the "Company") (TAIEX: 3698) announce the two companies will jointly establish a holding company A (tentative name) via share conversion, which was approved in the board of directors' meetings of Epistar and Lextar respectively today.

The share conversion ratios of the two companies are tentatively set at one share of Epistar for 0.5 ordinary share of company A, and one share of Lextar for 0.275 ordinary share of company A. Acting as III-V semiconductor investment platform, Company A is committed to flourishing current businesses of Epistar and Lextar and exploring advanced technologies for applications including mini/micro-LED display, intelligent sensing and III-V semiconductor microelectronics fields. While the company A will lead to strengthen the global competitiveness of both companies, Epistar and Lextar will operate independently and there will be no impact on their respective customers and employees.

Expertise, Collaboration, and Synergy

The synergy of this collaboration includes the following: (1) to integrate the resources and to refocus expertise of two companies. In the new era, Epistar will focus on LED upstream and midstream technology with Lextar becoming one of its valuable customers and Lextar will concentrate in-depth on downstream technologies with Epistar being one of its strategic suppliers, (2) to reinforce the connection between resources and product/technology development for faster commercialization, and to maximize the benefit with efficient investment and cost management, (3) to urge the application of mini/micro-LED technology to benefit customers, partners and consumers.

In the future, the two parties will jointly create a new milestone in the III-V compound semiconductor industry through this collaboration.

Corporate Governance of Company A

The daily operation of company A will be coordinated and decided by the Steering Committee jointly established by both parties. Each of Epistar and Lextar will have two representatives sitting in the Committee.

Focus, Complement and Optimization   

Dr. B.J. Lee, Chairman of Epistar, said in terms of display application, LED technology has to not only win out in the competition, but also widen the gap to be ahead of other competing technologies within the shortest time. In other words, at this critical moment, the LED industry needs more collaboration than ever. In the future, company A will manage and plan overall operation to leverage the resources effectively and to develop the collaboration strategy for the industry in a macro view so all subsidiaries of company A can evolve on this platform. Patrick Fan, President of Epistar, said that Epistar will continue to concentrate on the upstream and midstream of LED to provide better products and services in this collaboration while Lextar will focus on the downstream products and become one of Epistar's important customers. This will not only contribute to the overall supply chain, but also accelerate the application development, so that consumers can enjoy the advantage of miniaturization of LED that can improve visual quality of displays for daily life.

Dr. David Su, Chairman and CEO of Lextar, said that the products of Lextar span the upstream, midstream and downstream of the industry. The company has not only the talents of each process platform, but also the capability of T.E.M.P. (Thermal, Electrical, Mechanical, Photo-electrical) integration. In the same time, Lextar has the advantage of retaining downstream customers and being close to the market. As the deepening of the collaboration, Epistar will become a strategic partner of Lextar for LED dies and Lextar will focus on the development of packaging and modular technologies to provide prompt services to worldwide customers.

Company A will integrate the advantage of Epistar and Lextar to create synergy in the collaboration. We believe company A will bring more values to the desires of mini/micro-LED display and 5G ecology in the future, thus generating a positive contribution to shareholders' rights and interests of both companies.

About Epistar Corporation:

Since founded in 1996, EPISTAR has been concentrating on the R&D and manufacturing activities of LED epi and dies products. Having accumulated tremendous expertise and profound knowledge, the ability of R&D and manufacturing, and the advantage of full-spectrum product portfolio, EPISTAR is able to satisfy customers' various demands and becomes a leading brand of global LED dies supplier. EPISTAR has gone through several M&A and cross licenses with first-tier LED companies, and its revenue in 2019 is NT 15.96 billion. In 2018, EPISTAR spun off three major business units. Based on its core technologies, EPISTAR extends its footprints from LED to different fields incorporating III-V semiconductor compound. Therefore, its roadmap has been expanding from "Actualize LED Potential" to "Actualize III-V Semiconductor Potential". -

About Lextar Electronics Corp:

Lextar Electronics Corp. (TAIEX: 3698), founded in 2008 in Taiwan, specializes in manufacturing opto-semiconductor epitaxial, chips, packages, modules and integrated solutions. The range of applications includes LCD backlighting, R/G/B display, automotive lighting, professional lighting, sensing and UV. The company now houses around 3,500 employees and its headquarters is in the Hsinchu Science Park, Taiwan. Lextar has two manufacturing sites in Taiwan, and two in China, which are Chuzhou and Suzhou respectively. Lextar's turnover in 2019: USD 300 million. -