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 LED lighting market has seen a boom in growth starting in the last half of 2013. Rapid growth is attributed to price drops, government policies, and rising cost in power usage, according to investment group CLSA. These three catalysts are anticipated to drive up LED lighting penetration rate from 20 percent in 2013 to 44 percent by 2016.

Taiwanese LED chip manufacturer Epistar saw earnings turn to losses in 3Q13, due to loss on valuation of financial liability. Although, the company’s gross profit rebound rate was much lower than expected in 2013, higher gross profits from Embedded LED chip (ELC) and AlInGap products will help gross profits return to 17.8 percent levels, CLSA forecasted.

Rapid LED price drops for LED bulbs have driven up penetration rates, according to the latest CLSA Asia- Pacific Markets report . Chinese LED lighting market penetration rates for 2014 are expected to increase to 15 percent from 3 percent in 2012, according to a recent report by CLSA. Global LED lighting market growth will stimulate LED chip shipments in 2013-2014. CLSA is optimistic that Chinese LED manufacturers will benefit from this trend, listing LED chip manufacturer San’an and lighting manufacturer Yankon as main beneficiaries.