Opto Tech gets business boost from Japanese investors

Taipei, June 29, 2005 (CENS)--Light-emitting diode (LED) maker Opto Tech Corp. of Taiwan expects its monthly shipments to surge ten folds beginning in the second half of the year thanks to orders from Japanese shareholders Nichia Chemical and Hitachi Cable, according to company president Y.C. Huang.

Huang recently said the two Japanese partners had pledged to place orders with his company, which will help boost his company's shipments to 100 million diodes a month from current 10 million diodes beginning next half. He noted that the orders do not have licensing problem since the two Japanese partners are the owners of some white-light LED patents that are widely used by Taiwanese diode suppliers.

The two Japanese companies have recently become Opto Tech's shareholders by acquiring part of the Taiwanese company's new shares for a combined two billion yen (US$18 million at US$1:JPY 109). They each hold one seat at Opto Tech's director board, making them first Japanese suppliers to invest in a Taiwanese LED business. From the new-share issuance, Opto Tech raised around NT$1 billion (US$32 million at US$1:NT$31) for operation.

Huang noted that Nichia contracted his company to make LED based on Nichia's dies in the initial stage, promising a profit margin of at least 10%. Nichia, Huang added, promised to offer his company diode wafers if its dies run short and had passed on handset supplier using its chips to his company. The Japanese supplier, he said, hopes to venture into mainland Chinese market through his company.

Huang reported that a leading household-appliance supplier in Japan was trying to offer his company orders through Hitachi. He noted that Hitachi had been concerned about when his company would spin off its organic LED (OLED) business unit, which had been the company's money-losing engine since it entered this field two years ago.

Huang said the OLED unit had become better and projected to ship 10 million to 20 million diodes throughout this month. He expected his company's monthly operation to break even soon this year and begin making money next year. His company is one of the world's leading LED-chip suppliers and Taiwan's No. 1 LED-chip supplier, producing two billion units a month. Its revenue will likely post at NT$500 million (US$16 million) this month alone.