Tyntek Corp, a Taiwan-based LED chipmaker, recently said it is seeking to acquire its local rival Ubilux to expand its output of LEDs for panel backlighting, according to an article on Taipei Times. The acquisition will make Tyntek Taiwan’s third-largest LED chipmaker, after Epistar Corp and Optotech Corp, the report said.

Tyntek said its board has approved a proposal to acquire Ubilux, a LED arm of Powerchip Semiconductor Corp. According to Tyntek, the acquisition will be conducted through a share swap, and one Tyntek share will be exchanged for 1.375 Ubilux shares. Tyntek will issue 88.07 million new common shares for Ubliux shareholders, making the deal worth about NT$2.81 billion (US$86.8 million). After the acquisition, Powerchip will become the biggest shareholder at Tyntek. The deal is scheduled to close on March 1.

The Hsinchu-based company hopes to build a stronger presence in the booming LED backlight sector, as growing demand for LED TVs has caused severe supply constraint. Tyntek aims to increase its MOCVD tool, which is used to make LED chips, from six units at present to 30 units by the end of next year. This would help generate at least NT$800 million in revenue next year and another NT$2.5 billion in 2011, the company said.