Epistar Inc., the No.1 LED chipmaker in Taiwan, is reportedly to be acquiring Huga Optech Inc., the island`s second biggest LED provider, to ease its straining capacity, and is near the end of the acquisition.

According to people familiar with the acquisition plan, Epistar will first buy the 30% ownership in Huga held by Inventec Corp. Before this deal, Epistar has acquired four domestic peers including United Epitaxy Co., Ltd. and South Epitaxy Corp, and has become world`s biggest red LED chips supplier.

Epistar`s monthly output of blue LED chips is estimated to surge above two billion units as soon as it acquires Huga, posing it a formidable competitor to the island’s other LED manufacturers like Formosa Epitaxy, Tecore Co., and Genesis Photonics.

Epistar`s spokesman, S.T. Chang, however, said he has never heard of the acquisition plan although the company`s blue-chip and red-chip productions are running at full capacity.

Huga Chairman J.T. Chen said he has neither heard of the acquisition although he welcomes an industry-wide integration.