SemiLEDs Stock

SemiLEDs Corporation develops, manufactures, and sells light emitting diode (LED) chips and LED components, LED modules and systems.

The company’s products are used for general lighting and specialty industrial applications, including ultraviolet (UV), curing of polymers, LED light therapy in medical/cosmetic applications, counterfeit detection, germicidal and viricidal devices LED lighting for horticulture applications, architectural lighting, and entertainment lighting.

Utilizing the company’s patented and proprietary technology, its manufacturing process begins by growing upon the surface of a sapphire wafer, or substrate, several very thin separate semiconductive crystalline layers of gallium nitride, or GaN, a process known as epitaxial growth, on top of which a mirror-like reflective silver layer is then deposited. After the subsequent addition of a copper alloy layer and finally the removal of the sapphire substrate, the company further processes this multiple-layered material to create individual vertical LED chips.

The company packages its LED chips into LED components, which it sells to distributors and a customer base that is heavily concentrated in a few select markets, including Taiwan, the United States, the Netherlands, Norway, and Japan. The company also sells its ‘Enhanced Vertical’ (EV), LED product series in blue, white, green, and UV in selected markets. The company sells its LED chips to packagers or to distributors, who in turn sell to packagers. The company’s lighting products customers are primarily original design manufacturers (ODMs), of lighting products and the end-users of lighting devices. The company also contracts other manufacturers to produce for its sale certain LED products, and for certain aspects of its product fabrication, assembly, and packaging processes, based on its design and technology requirements and under its quality control specifications and final inspection process.

The company has developed advanced capabilities and proprietary know-how in reusing sapphire substrate in subsequent production runs; optimizing its epitaxial growth processes to create layers that efficiently convert electrical current into light; employing a copper alloy base manufacturing technology to improve its chip’s thermal and electrical performance; utilizing nanoscale surface engineering to improve usable light extraction; manufacturing extremely small footprint LEDs with optimized yield, ideal for Mini LED applications; developing a LED structure that generally consists of multiple epitaxial layers, which are vertically-stacked on top of a copper alloy base; developing Chip Scaled Packaging (CSP) technology; and developing multi-pixel Mini LED packages for commercial displays. These technical capabilities enable the company to produce LED chips, LED component, LED modules and System products.

SemiLEDs Optoelectronics Co., Ltd. (Taiwan SemiLEDs) is the company’s wholly owned operating subsidiary, where a substantial portion of its assets are held and located, and where a portion of its research, development, manufacturing and sales activities take place. Taiwan SemiLEDs owns a 97.37% equity interest in Taiwan Bandaoti Zhaoming Co., Ltd., which is engaged in the research, development, manufacture and a substantial portion of marketing and sale of LED products, including lighting fixtures and systems.

Products

LED Chips

The company produces and purchases a wide variety of blue, white, green, and UV LED chips, including its EV LED product series, ranging from chip sizes of 380 microns, or µm, by 380µm to 1520µm by 1520µm. The company sells its LED chips to packaging customers or to distributors, who in turn sell to packagers. The company’s LED chips are used primarily for applications in the specialty lighting market, including commercial and industrial sectors. The company’s LED chips may be used in specialty industrial applications, such as UV curing of polymers, LED light therapy in medical/cosmetic applications, counterfeit detection, LED lighting for horticulture applications, and architectural lighting. The company focuses mostly on UV LED applications.

LED Components

The company packages a portion of its LED chips into LED components for sale to distributors and end-customers in selected markets. The majority of the company’s LED components use chips that are greater than 860µm by 860µm, focusing on high wattage (>3W) applications. The company’s packaged products can be categorized into three different groups: UV, Multi-Channel Emitter (MCE), automotive and Specialty lighting. Besides the standard products, it provides customization service for all market segments. The company’s UV LED product portfolio ranges from two to 260 electrical watts, and are designed for industrial applications, such as printing, coating, curing, and medical/cosmetic uses. The MCE packages target entertainment, architectural, aquarium, and horticultural lighting sectors. Variations of four, seven, 12, 16 channel LEDs allow users to control each LEDs separately to produce all colors in the visible light spectrum. The company uses specialized chip bonding technology to ensure minimal chip-to-chip distance in order to deliver optimized color mixing capability in compact packages. Specialty lighting is mainly in the infrared spectrum with options of 30, 60, 90 and 120 degree view angles. These are used in surveillance, IP cameras, and night vision applications.

To differentiate itself from other LED package manufacturers, the company is putting more resources towards module and system design. Along with its technical know-how in the chip and package sectors, the company is able to further integrate electrical, thermal, and mechanical manufacturing resources to provide customers with one-stop system services. Services include design, prototyping, OEM and ODM. Key markets that the company sets to target at the system end include different types of UV LED industrial printers, aquarium lighting, medical applications, niche imaging light engines, horticultural lighting and high standard commercial lighting. In 2019, the company introduced multi-pixel Mini-LED package (16 RGB pixels in one package) for fine pitch Mini-LED display market and expanded its UVC portfolio to disinfection markets.

The company’s packaging process includes chip bonding, wire bonding, phosphor coating, encapsulation, scribing, dicing, and testing. The company may, from time to time, establish packaging operations in selected markets for sale to distributors and end-customers in such markets. The company also contracts with other manufacturers to produce for its LED components based on its design and technology requirements and under its quality control specifications and final inspection process.

Lighting Products

The company designs, assembles, and sells lighting fixtures and systems for general lighting applications, including commercial, residential, and industrial lighting. The company’s lighting products consist primarily of LED luminaries and LED retrofits. The company’s lighting product customers are primarily ODMs of lighting products and the end-users of lighting devices.

OEM/ODM Services

The company provides design and manufacturing services at the modular and system level. Most of the design projects involve high power UV LED lamps to be incorporated/retrofitted into large scale press equipment. Besides hardware, it also provides software development to lamp control and equipment-to-lamp signal communication. With the company’s design capability and high precision packaging capabilities, Taiwan Bandaoti Zhaoming Co., Ltd., formerly known as Silicon Base Development, Inc., assisted in the design and manufacturing of transceiver modules to be used for ADAS (Advanced Driver Assistance Systems) applications.

Sales and Marketing

The company markets and sells its products through both its direct sales force and distributors. The company primarily sells its LED components to distributors and end-customers in selected markets. The company’s packaging customers package its LED chips and sell the packaged product to distributors or end-customers. The company’s distributors resell its LED chips either to packagers or to end-customers. The company sells its LED chips to packagers and distributors. The company’s lighting product customers consist primarily of ODMs of lighting products and the end-users of lighting devices with the sales made by its direct sales force. For modules and systems, the company mainly deals with end-customers directly.

The company’s direct sales force is primarily based in Taiwan. The company assigns its sales personnel to different geographic regions so that they can keep abreast of trends in specific markets. The company plans to continue expanding its sales coverage in Asia as it grows its business. In addition, the company may enter into strategic relationships with companies in Taiwan or other countries that may provide strategic value to it.

Customers

The company packages its LED chips into LED components, which it sells to distributors and end-customers in selected markets. In addition, the company sells a portion of its LED chips products to packaging customers and LED chip distributors.

For the year ended August 31, 2023, sales to INDEL Distribution B.V. and Revlon, Inc. accounted for 20% and 17% of the company’s total revenues, respectively.

Intellectual Property

As of August 31, 2023, the company had 101 patents issued and 14 patents pending with the United States Patent and Trademark Office covering various aspects of its core technologies. As of August 31, 2023, the company also had 111 patents issued and 17 patents pending before patent and trademark offices outside the United States. Of these 212 issued patents, 135 expire between 2024 and 2028, 62 expire between 2029 and 2033, 11 expire between 2034 and 2040, and four expire after 2040. Forty-two of the company’s issued patents are design patents and one of its pending patents is a design patent.

The company pursues the registration of certain of its trademarks in the United States, Taiwan, and China; and has been granted trademarks with respect to ‘SemiLEDs’ in the United States, and ‘MvpLED’ in China.

Research and Development

The company’s research and development were $1.4 million for the year ended August 31, 2023.

History

SemiLEDs Corporation was founded in 2005. The company was incorporated in the state of Delaware in 2005.