Last Friday, HC SemiTek announced plans of investing a total of RMB 1.18 billion (US $189.4 million) in the third phase of their LED epitaxial wafer project. The company’s stocks will resume trading today. 

HC SemiTek has already begun construction to expand their factory in Suzhou. The project will use the combined 14,500 square meters of the pre-existing epitaxial factory and chip factory. The company will purchase a total of 589 MOCVD, PECVD, ICP, and other production and auxiliary equipment. Out of the units purchased, 466 will be imported and 123 units will be domestically manufactured in China. 

The company will invest a total of RMB 1.18 billion into the project. Of which, RMB 931 million will be invested in equipment, RMB 54 million for construction and installation, and RMB 100 million as initial working capital. The construction phase will last a year. After completion of the plan, the company anticipates production volume to reach 656,000 pieces for 4 inch LED wafers and 262 million for LED chips. Annual retail sales are estimated to be RMB 799 million and full year profit to reach RMB 160 million. 

The company will fund raise RMB 424 million use debt-financing methods for the remaining RMB 760 million.  

With first and second phase expansion production already completed at their subsidiary in Suzhou, HC SemiTek plans to expand production capacity further to meet the daily production goal of 1 million 2 inch wafers. This will be in equivalent to purchasing 200 MOCVD, PVD and other epitaxial wafer infrastructures, based on current model estimations.