Epistar’s acquisition of FOREPI earlier this week rocked the LED industry. Foreign financial institutes have tooted the merger as a win-win for both sides, as it will boost Epistar’s global market shares to 20 percent and production capacity up 30 to 40 percent, according to a United Evening News report. 

The merger will not only expand the new company’s patents and shared technology, but will also boost profits, according to JP Morgan. Epistar anticipates an increase of 25 percent monthly capacity and reduce price competition from former rival FOREPI. In regards to FOREPI, the company’s production efficiency and net profit will reach Epistar’s current level within 6 to 12 months. 

Morgan Stanley was also optimistic about the merger and believes Epistar will see rapid increase in revenue, production capacity, and R&D, according to CNA news. 

For Citibank, the merger is confirmation that LED lighting and backlight demands remain strong. The merger will not only reduce single production costs, but also beneficial in obtaining more backlight clients and U.S. lighting brand clients.

Epistar’s merger with FOREPI will widen the distance between the company and Chinese rival San’an Optoelectronics, said CLSA. The financial firm pointed out, however, the merger could create a trend in upstream supply chain of large enterprises becoming even bigger, thus reducing supply options, and negatively impacting downstream LED package manufacturers.