The Xiamen Torch Hi-tech Industrial Development Zone management committee has signed an “Investment Agreement” with Changelight’, according to a recent company announcement.

The committee has agreed to subsidize up to 48 percent of Changelight equipment costs for InGaN EPI-wafer MOCVD equipment for LED production. However, the subsidy is capped at RMB 5 million (US $810,000) per equipment, and only for 50 machines bringing the maximum subsidy to RMB 250 million. The subsidy will be paid in instalments.

Changelight has invested RMB 5.0 billion to add 100 MOCVD equipment xpand production of InGaN LED EPI-wafer, chips and lighting products. The expansion will be implemented in two phases. Initially, RMB 2.0 billion will be invested in the purchase of 50 MOCVD equipment and the establishment of production lines, facilities, auxiliary equipment, and factories. The expansion will be carried out close to the company’s Xiangan factory in the Xiamen Torch Hi-tech Industrial Development Zone.

Under the agreement, the 50 MOCVD equipment must be initiated and enter production within one year of the investment agreement, and no later than late September of 2015. If the company fails to complete the 50 MOCVD installation from the first phase, Xiamen authorities will withdraw financial support for the second phase of the expansion project. The company plans to invest RMB 3.0 billion in the second installation phase which will span for two-years.