News Article

Lextar To Adopt 6” MOCVD Reactors And Raise LED Chip Production To 70%

The Taiwanese firm expects to expand with a further two manufacturing plants in Taiwan and China to help keep up with the demand for LEDs.

 Lextar Electronics has announced its latest Q2 2010 unaudited results and says the huge increase in revenues are mainly down to the growing demand for LED applications. ‘

“Thanks to strong demand for LED backlight for large-sized LCD panels, our capacity was nearly fully loaded and led to an outstanding revenue performance in the second quarter," said B.Y. Chang, CFO of Lextar Electronics.

“Although faced with rising costs of sapphires and other raw materials, the addition of our new equipments have contributed to the in-house chip production. In addition, by utilizing a vertical integrated production model from upstream epitaxy and midstream chip manufacturing to downstream packaging, as well as considering the numerous benefits from the synergy resulting from Lextar’s merger with LightHouse Technology in March earlier this year, the production costs were effectively decreased and gross margins of second quarter increased to 28.7%."

Lextar currently has over 50 MOCVD tools and estimates the number will increase to approximately 80 by the end of the year including 6 inch reactors.

In the future, Lextar hopes to raise the percentage of in-house LED chips to 70% and introduce new equipment for higher productivity. Its new production site in Chunan, Taiwan is designated to be the lighting application production base, with production lines to include SMT (surface-mount technology) and LED light module assembly.

This will be Lextar’s fourth production facility and is estimated to begin mass production in Q4 2010. Another manufacturing base currently under construction in Suzhou, China is scheduled to be outfitted with equipment early next year and begin production in Q1 2011.

The firm expects to hire an additional 1800 new employees by the end of this year for the latest additional bases.

For Its latest quarter, Q2 2010, Lextar posted consolidated revenue of NT$2,381 million. Gross profit improved 149.6% quarter-over-quarter to NT$684 million, with a gross margin of 28.7%. Operating profit was NT$518 million and net profit was NT$460 million, a 201.4% increase over the same quarter last year. The basic EPS was NT$1.42 per common share.

For the first half of 2010, Lextar reported revenues of NT$3,691 million, with net income of NT$613 million or basic EPS of NT$2.02 per common share. The projected ROE for year 2010 is expected to reach 25.4%.

In the immediate future, Lextar will continue to expand its LED lighting market product portfolio.

Lextar Electronics Corporation founded in 2008, is funded by AU Optrnoics Corporation (AUO). Lextar specializes in manufacturing high-brightness LED epi wafers, chips and packages, as well as energy-saving and smart lighting products.

The company now houses more than 2,000 employees and its headquarters are in the Hsinchu Science Park, Taiwan. Its manufacturing plants are located in the Hsinchu Science and Industrial Parks.

In the future, the company plans to set up additional plants in Chunan in Taiwan and Suzhou in China.
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