Recently, in order to diversify its business coverage and expand business scale, Formosa Advanced Technologies Company (FATC) announced it will enter into LED chip backend production, with corresponding sales contribution set to double on year.

FATC decided to extend its presence from memory in light of its volatility, said company chairman Wen-Yuan Wong during a June 27 shareholders meeting. Given that LED packaging is similar to DRAM, FATC thus decided to partner with Nan Ya Photonics on LED wafer grinding, sawing, probing and sorting. FATC indicated that it completed equipment installation and secured customer validation in February with official production to start in July. Sales contribution in 2008 is expected to be 2-3% and is expected to hit 5-10% during year-end of 2009.

As a leading LED backend service provider in Taiwan, Youngtek Electronics, commented that LED chip sorting has the highest business potential among all backend production processes. Company executives said they are not worried about newcomers in the industry, but noted in saying that the LED backend segment is a hard business that requires strong sales to compensate for low margins.