Taiwan LED chip Supplier Epistar has acquired a 40% stake in Nan Ya Photonics for NT$1 billion to support the reinvested company for the output expansion.

According to Epistar`s president, M.J. Chou, the reinvestment will pay off in 2011, when Epistar can secure expanded supply of LED lightings through Nan Ya Photonics.

Currently, Nan Ya Photonics, cooperated with Taiwan`s Formosa Plastic Group and engaged in production of LED applications, has been busy installing new production equipment at its Taiwanese factory. Epistar has dispatched its engineers to the factory to assist it.

Despite Chou didn’t decide to increase its stake in the reinvested company, industry insiders believed that Nan Ya Photonics, with paid-in capital of NT$2.5 billion, is very likely to raise its capital soon, mainly judging from the company`s ambition to explore the market for LED lightings.

Chou revealed that Nan Ya Photonics has started trial production of LED bulbs and sent some to clients for certification. He also added that the company is likely to penetrate the market for LED lightings by offering contract production service to large-sized clients of this kind.

As Nan Ya Photonics starts mass producing LED bulbs and related LED lightings as streetlights in 2011, it may bring a booster to Epistar in the business of LED lightings.

Aside from that, Chou said his firm aims for a 30% capacity increase in LED lightings, including ones available from Nan Ya Photonics, next year.

According to institutional investors, LED lightings look to make a contribution over 35%, or more than NT$8 billion, to Epistar`s total revenue in 2011 along with expanded output.