Kopin Corporation today announced that it has formed a joint venture company with strategic and financial investors to establish light-emitting diode (LED) operations in Asia. In addition to Kopin, the principal investors are: a premier LED packaging manufacturer with operations in Taiwan and China; WK Technology Fund, a leading global venture capital firm based in Taiwan; and KTC, a Taiwanese III-V semiconductor manufacturer.
The joint venture company, called KO-BRITE Corp., combines Kopin's indium gallium nitride (InGaN) LED production know-how, capital from the strategic partners and local management expertise from the Taiwanese companies. These unique strengths will be used to establish GaN materials growth capabilities in Taiwan and LED die production capabilities in China. For its contribution of production know-how and $3 million in funding, Kopin will obtain an approximate 20 percent interest in KO-BRITE. Taiwanese partners and investors in the joint venture will contribute an additional $11.5 million, for a total capitalization of $14.5 million. Under an agreement, Kopin will receive $7.5 million from KO-BRITE upon successful completion of training services, equipment transfer and other considerations.
"Current technological and economic trends affecting the LED industry clearly indicate that successful participants will need both leading-edge technology and a competitive cost structure," said Dr. John C.C. Fan, Kopin's president and chief executive officer. "This joint venture combines Kopin's LED production know-how, with the proven ability of the strategic partners to successfully manage operations in China and Taiwan. These strengths will position KO-BRITE as a technology leader with a strong management team and one of the lowest manufacturing cost structures in the industry."
"This venture represents the 'low-cost, higher performance' LED business strategy needed to competitively pursue opportunities with tier one customers in the United States, Europe and Japan, as well as with companies in China and Taiwan, the two fastest growing markets for solid-state lighting," Dr. Fan continued. "This transfer of our LED operation to KO-BRITE, together with our dominant position in the HBT market and strong growth trends of the consumer and military markets for our CyberDisplay product line, bodes well for Kopin in 2005 and beyond."
Kopin expects to cease all LED manufacturing activities by the end of March 2005. The Company plans to complete training and the transfer of its LED operations to KO-BRITE by July 1, 2005. This transaction may result in a non cash impairment charge. The Company plans to provide specific financial information about the impact of this transaction in its fourth quarter 2004 news release and conference call on Thursday, February 24.
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