Genesis Photonics Inc. (GPI) second largest investor, Chicony, has acquired a 7% stake worth NT $350 million (US $11.14 million) of Everlight bonds, reported China Times.

Everlight has issued a total of NT$ 5 billion (US $160 million) worth of convertible bonds to finance the company’s production expansion plans.

In late March, Everlight announced it would be issuing bonds to finance its five-year production expansion plan, which is estimated to amount to NT $30 billion in total.

Chicony, 7% stake in Everlight would form a strategic alliance between GPI and Everlight. Chicony is GPI’s second largest investor with its 5.71% stake in the company.

Everlight announced in a statement Tuesday it has started issuing convertible bonds, and confirmed Chicony was one of the main investors. The bonds will be open to strategic investors as well as financial investors.

Chicony’s vice chairman Mao-Kuei Lin started his career in Lite-On Technology and was already very familiar with the LED industry at the time. It is unsurprising that he has used this relationship to acquire Everlight convertible bonds. In addition, Everlight is also one of GPI’s biggest clients in Taiwan. In terms of GPI’s client list, GPI ranks just behind Korean and Japanese clients.

The merge of global LED chip manufacturers has led to massive production capacity among LED chip makers. Hence, many manufacturers are seeking downstream export markets to rid LED chip production capacity. Everlight is the world’s top eight LED package manufacturer, and is an important export channel for Epistar and GPI products. Epistar currently has 500 MOCVDs, while GPI has 72 MOCVDs. Although, GPI will not be importing new equipments this year, it will be upgrading its machines from 2-inch wafer production to 4-inch.