Neo-Neo to Be Fully Integrated LED Manufacturer

Taipei, June 27, 2008 (CENS)--The Neo-Neo Group will start producing epitaxy wafers in September this year, becoming the first Taiwanese LED-lighting maker to be an integrated manufacturer with front-, middle- and back-end productions.

The group, reported to be the world's No.1 supplier of LED decorative lamps and mini lamps, has spent US$30 million on the first phase of the construction, which is to put out 12,500 wafers with a total 400 million LED chips initially. The factory is constructed on a 300-acre site in Guangdong Province of mainland China, where the 28-year old company is headquartered.

The output volume, however, will remain far short of the group's needs; so the group plans to spend around US$20 million for outsourced wafers yearly for its LED lighting products.

According to industry watchers, the integrated production will help the group further cut production costs while sharpening competitiveness.

In light of the technology-laden investment, Guangdong provincial government is allowing the group a 15% reduction in corporate income tax, resulting in the group's paying 10% lesser tax than do average lighting manufacturers in China.

Neo-Neo Group President B.H. Fan estimated the group's sales of LED decorative lighting for this year to double from last year. In the meantime, the company's sales of incandescent lamps would likely decrease 30%, with incandescent decorative lighting to be completely phased out of market in three years.

Although home loan credit crunch has hurt the group's sales in the United States, Fan is confident that the group's sales will eventually rise around 30% by the end of this year driven by anticipated brisk demand for LED lighting products in other markets. He projected LED lighting to account for close to 70% of the group's revenue this year.

Fan believes the global market of LED decorative lighting still has ample room to grow considering that LED has so far replaced less than 10% of traditional lamps.

The company has also showed impressive growth in LED streetlight sales. Fan pointed out that decorative lighting and streetlights will remain the major applications of LED lamps because of restrictions of size of lampshades, ruling out the use of fluorescent lamps during upgrades.