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Opto Tech favors Nichia deal over China fab

Partnership suits both parties as notebook backlights reportedly increase demand for Nichia-branded LED die amid slumping sales elsewhere.

Taiwanese LED maker Opto Tech Corporation has made a dramatic shift in strategy, halting construction of a factory and instead collaborating more closely with Japanese counterpart Nichia.

The GaN LED pioneer invited die maker and packager Opto Tech to invest in it and strengthen the firms mutually beneficial alliance in December.

Opto Tech began selling Nichia-branded products following a licensing agreement signed in 2004. That boosted Opto Tech s blue LED business, while the December deal represented a ¥1.06 billion ($11.7 million) investment in its Japanese partner.

“Nichia helped us to overcome hardship years ago, we always co-operate well,” an Opto Tech spokesperson told compoundsemiconductor.net. “This will bring the collaboration even closer. Both companies can develop more business and earn more profit.”

Building work has not yet started on an additional chip-making factory in Ningbo, China, that Opto Tech had planned to increase its capacity with, although the site has been fully prepared.

“Because of the economic depression around the world, we decided to slow down the plan for the Ningbo plant,” the company said.

According to the Chinese Economic News Service and Digitimes, the enhanced collaboration comes as Nichia is attempting to increase its bare LED die sales. Opto Tech has helped Nichia to achieve this with recent qualifications from three different companies operating in the notebook LED backlight supply chain.

Under the alliance, Opto Tech will now produce more Nichia-branded die and Nichia will also supply its own die to the Taiwanese firm to support the effort to increase volumes.

CENS says that Opto Tech s investment will gain it 10,000 shares in Nichia, and is likely to be followed by a similar investment in the reverse direction.

In 2009 Opto Tech expects its sales of Nichia-branded die to double to NT$1 billion ($30 million), explains the CENS article. NT$5.1 billion of Opto Tech s NT$6.5 billion overall revenue for 2008 was earned from chip sales, with the company slicing enough epiwafers to produce four billion chips.

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