Taiwanese LED manufacturer Lextar has approved leading U.S. LED manufacturer Cree’s NT $83 million investment in the company during a recent shareholder meeting, according to several Taiwanese media reports.

The new agreement between leading U.S. LED manufacturer Cree and Taiwan electronics firm Lextar, which stipulates Cree will invest $US 83 million in the Taiwanese firm, comes as a surprise, according to LEDinside, a subsidiary of the Taiwan-based market research firm TrendForce. Under the agreement, Cree and Lextar will also cooperate on LED chip supply and royalty-bearing licenses for certain Cree LED chips. 

Leading U.S. LED manufacturer Cree surprised the LED industry on Aug.26, 2014 with the announcement of an investment partnership totaling US $83 million to purchase 83 million Lextar shares at a price of NT$30 (US $1.00) per share. The company also stated the partnership included long-term LED chip supply agreement and royalty-bearing license agreements for certain Cree LED chips. Why has Cree decided to invest in Lextar now?

Cree, a market leader in LED lighting, and Lextar Electronics Corporation (TAIEX: 3698), today announced that the companies have entered into an agreement whereby Cree will make an investment in Lextar and the companies will enter into a supply agreement for sapphire-based LED chips. As part of the agreement, Cree will invest approximately US $83 million to purchase 83 million Lextar shares at a price of NT$30 (US $1.00) per share.