Opto Tech Corp. and Nichia Corp. will go further on LED cooperation, with Nichia pledging to increase supply of LED chips to its partner in return for Opto Tech’s commitment to making its chips on a contract basis and selling more of Nichia-branded chips to packagers.

Opto has sent samples of the contract chips it makes for Nichia to its customers in Taiwan, the United States and Japan, and has acquired verifications from three Taiwan packagers. Opto expects its annual revenue from sales of Nichia chips to double to NT$1 billion this year, which will represent around 20% of its total sales revenue.

Although Nichia has been known for its globally brightest white LED emitters, the company has made the chips for its own packaging lines. Taiwan industry watchers pointed out Nichia now wants to boost the sales of its chips worldwide in light of growing LED market.

As part of the cooperation, Nichia has invited Opto Tech to hold 10,000 shares of the firm, and will likely increase its shareholding in Opto Tech. Also, Nichia has sent its representative to station in Opto Tech since last year to better serve its customers in Taiwan.

Opto Tech had revenue of around NT$6.5 billion last year, with NT$5.1 billion generated from chip making and the remaining portion from big outdoor LED signages. The company is said to be the world’s No.1 chip cutter, slicing four billion chips on epitaxy wafers a year.