Formosa Epitaxy Inc. (FOREPI) has signed a deal with mainland Chinese LED maker San’an, which makes San’an the No.1 institutional shareholder of FOREPI.

FOREPI Chairman F.J. Chien said San’an s 19.9% acquisition of his company’s ownership will help his company enter mainland China’s LED market and bring down his company’s production cost.

What’s more, Jien noted that after cooperating with San’an, his company will enter into alliance with mainland China’s No.1 LCD maker, BOE Co., Ltd., whose products use LED as backlight.

He pointed out that in world LED market, Taiwan’s manufacturers face not only competition from South Korean and mainland Chinese manufacturers but also competition from European, American and Japanese manufacturers. In the competition, the company has neglected the importance of capacity size until entering into alliance with San’an.

San’an’s chairman, Lin Xiucheng, estimated the partnership would help slow down undercutting competition in the market. He said the partnership will help the two companies in bringing down cost and squeezing into supply chains of international brand names.

According to industry executives, San’an will hold at least two seats at FOREPI’s board of directors after FOREPI completes its capital increase plan.