San’an Opto was granted RMB 230 million (US $37.11 million) subsidy by Torch Hi-tech Industrial Development Zone Committee for 50 MOCVDs the company recently purchased, according to a news report from China Securities Journal.

San’an Opto released a statement on December 16 saying the company has transferred private funding raised in 2013 for LED investment and infrastructure to “The company’s wholly owned subsidiary Xiamen San’an Opto Co., Inc. within Torch Hi-tech New Area (Xiang’an) Industrial Zone, Xiamen City, Fujian Province”.

The company signed an investment agreement with Torch Hi-tech Industrial Development Zone Management Committee to establish blue and green LED epi-wafer and LED chips production lines at Torch Hi-tech New Area. The committee agreed to subsidize the project company of San’an Opto on MOCVDs with production capacity estimations based on 2-inch 54 PCS for an amount of RMB 5 million. The subsidy will be paid through instalments based on the payment progression of the company’s project. San’an Opto plans of installing 200 MOCVDs with production capacity estimations based on 2-inch 54 PCS in total.

The company has acquired 50 MOCVDs each from AIXTRON and VEECO on Sept. 26, 2014 and Dec. 10, 2014 respectively, totaling to 100 MOCVDs. Based on 2-inch 54 PCS, the new MOCVDs production capacity is equivalent to 200 MOCVDs, and San’an Opto has received 40% of subsidies for the 50 MOCVDs installed, or equivalent to RMB 230 million.

According to China’s “Enterprise Accounting Regulation No. 16 – Governmental subsidy”, the subsidy is considered as deferred profit at the time received and will be allocated into the income during the life expectancy of the assets.