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Sino-American Silicon puts ambitious sapphire substrate plan into action.

Taipei, March 30, 2011 (CENS) -- In line with its ambitious goal of tripling sales of sapphire substrates this year from last year, Sino-American Silicon Products Inc., based in Hsinchu, northern Taiwan, will announce in late April plans to sharply boost output of the raw materials for making light emitting diodes (LEDs) to 500,000 wafers a month from current 90,000 wafers.

The company, a supplier of raw materials for electronics manufacturing, also projects to boost sales for the substrates to NT$2 billion (US$66.6 million at US$1:NT$30) by the end of this year, up from last year's NT$500 million (US$16.6 million).

Market demand for sapphire substrates is estimated to be driven up this year by robust inclusion of LEDs into flat-panel TVs and lighting fixtures. The March 11 earthquake ravaging northeastern Japan is expected to disrupt a 6% supply of the substrates worldwide, further spurring the manufacturers outside Japan to ramp up production to fill the supply shortfall.

Sapphire substrate has brought in Sino-American Silicon increased sales, injecting NT$91 million (US$3 million) or so in February, up 10% from a month earlier and gaining from only NT$10 million (US$333,333) recorded in January last year.

The company will expand its output capacity step by step, with the capacity to reach 180,000 wafers a month in the middle of this year and to accomplish the final goal of 500,000 wafers in the first quarter next year.

Sino-American is considering whether or not to spin off its sapphire substrate operation into a wholly owned subsidiary so that it can completely focus on manufacturing of raw silicon wafers for the chip-making industry.

Last year, the company had consolidated revenue of NT$22.5 billion (US$750 million), spiking 89.28% from a year earlier. In the meantime, it made NT$3.5 billion (US$118 million), or NT$10.5 per share, in after-tax net income. The earnings did not include the portion from sapphire substrate sales, inspiring expectations that sapphire sales will significantly push up the company's net income this year as the operation's gross margin stands between 50% and 60%.
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Title Annotation:Silicon Products Inc.
Author:Liu, Ken
Publication:The Taiwan Economic News
Geographic Code:9TAIW
Date:Mar 30, 2011
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