Neo-Neon Holdings Ltd (真明麗控股), a Guangdong, China-based decorative light manufacturer founded by a Taiwanese, Ben Fan (樊邦弘), yesterday said it planned to expand its output seven-fold over the next three years.
“We plan to install 30 additional units of metalorganic chemical vapor deposition [MOVCD] systems in the next three years at our Yangzhou plant’s advanced light-emitting-diode [LED] production lines,” company chairman Fan told a media briefing in Taipei yesterday.
The plan would require a capital commitment of about US$30 million, the company said in Hong Kong earlier.
Neo-Neon, the world’s largest manufacturer of decorative lighting products with a 50 percent market share, currently operates five MOVCD systems with a monthly output of between 10,000 and 12,000 wafers, which can be used to produce 500 million units of decorative lighting products.
At full capacity, the 30 additional units will be able to produce between 60,000 and 72,000 wafers a month, which translates into a minimum of 3 billion units of decorative lighting products, the chairman said.
“We will take up half of the [wafer] output to support our own production [of decorative lights] and sell the remainder on the market,” Fan said, adding that he was confident the demand for non-decorative LED lighting would pick up soon.
If costs could be reduced by half, LED lighting products could easily expand their share, currently around 0.6 percent, of the global market for lighting products, estimated to be worth US$129 billion next year.
“That will translate into more than US$100 billion in new business opportunities for LED producers,” CEO Kris Tseng (曾金穗) told a media briefing yesterday.
After securing orders for more than 30,000 LED street lamps from several Chinese cities, the company is hoping to increase its share of the China market from 10 percent to 30 percent, Fan said.
The company also plans to tap into the LED backlight market for use in notebooks, TVs and monitors as well as automobiles.
To fund its expansion, Neo-Neon plans to raise NT$2.06 billion (US$64 million) via the issuance of 140 million shares of Taiwan depositary receipts next week at NT$14.7 apiece, its underwriter Fubon Securities Co (富邦證券) said yesterday.
Hurt by the global slump, the firm posted revenues of HK$554 million (US$71.5 million) in the first half of this year, down 23 percent from a year ago. Net profit was HK$42.3 million.
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