Taiwan-based Delta Electronics and Epistar will establish a joint venture maker of LED epitaxial wafers and chips, tentatively named Guangzhou Crystalrich Lighting, in Guangzhou City, southern China, in the second half of 2011, with production to kick off in 2012, according to Delta.

The joint venture will have a planned paid-in capital US$125 million, with Epistar to invest US$89.75 million for a 71.8% stake and Delta US$35.25 million for a 28.2% stake, Delta indicated.

According to industry sources, the joint venture will install 30 MOCVD sets for its initial production capacity and have Skyworth, a China-based vendor of consumer electronics, as a third shareholder in order to tap the China market of LED backlight units for LCD TVs.

Delta has stepped into making LED lighting products for OEM clients and own-brand sale and expects to ship 5-8 million units in 2011, the sources noted. Through the upstream investment in the joint venture, Delta will not only secure supply of LED chips but also extend LED business from lighting to backlights, the sources analyzed. Delta and Epistar have cooperated to develop a variety of LED lighting products, the sources indicated.

In addition to Guangzhou Crystalrich Lighting, Epistar has set up a few joint ventures in China, including United LED with Taiwan-based semiconductor foundry United Microelectronics in Shandong Province and Epicrystal (Changzhou) with Taiwan-based EMS provider Lite-On Technology in Jiangsu Province.