Jucan Optoelectronics' project to produce 2.4 million red and yellow photoelectrode wafers and chips annually has commenced production.

On January 12, Jucan Optoelectronics issued an announcement stating that its fundraising investment project, "Annual Production of 2.4 Million Red and Yellow Photonic Epitaxial Wafers and Chips Project," has met the conditions for production. This project is implemented by its wholly-owned subsidiary, Jucan Optoelectronics Technology (Suqian) Co., Ltd. (hereinafter referred to as "Jucan Suqian"), and a production commencement ceremony was held on January 11, 2025, marking the official start of production.

Image source: Jucan Optoelectronics

Once fully operational, the project is expected to bring the company an annual production capacity of 2.4 million red and yellow epitaxial wafers and chips, increasing the company's annual operating revenue by more than 600 million yuan and its annual total profit by more than 100 million yuan.

The production launch of the fundraising plan is of great significance to Jucan Optoelectronics, mainly in the following aspects:

First, the product range has significantly increased. Jucan Optoelectronics' main products were previously GaN-based blue-green light chips. With the production of the IPO-funded projects, the company has added GaAs-based red-yellow light chips, thus significantly expanding its product range.

Secondly, the application areas have significantly expanded. The application scope of our products has expanded from the original lighting and backlighting fields to the direct display market. Unlike blue and green light chips, which are mainly used in general lighting, plant lighting, automotive lighting, mobile phone backlights, automotive backlights, and displays, the newly produced red and yellow light chips are mainly used in indoor and outdoor displays, car brake lights, traffic lights, and landscape decoration.

Third, synergies will enhance returns. Display manufacturing requires red/yellow light chips and blue/green light chips to form RGB modules. Jucan Optoelectronics' red/yellow light chips will assist in expanding the blue/green light chip market. While red/yellow light chips are technically challenging, they offer higher returns; their production will create synergies with the company's existing blue/green light chip business, significantly boosting the company's performance.

With the commencement of production following the fundraising project, Jucan Optoelectronics has successfully transformed from a monochrome LED chip supplier to a full-color LED chip supplier, achieving full coverage of its products in the three major application areas of lighting, backlighting, and display. Furthermore, the full-color product range and strong brand will positively contribute to the company's efforts to increase market share, consolidate its market position, and expand profit growth points.

According to reports, in August 2024, Jucan Optoelectronics issued an announcement stating that the company observed the rapid rise of the small-pitch display, full-color screen, and RGB white light markets. The coordination and synergy between red/yellow and blue/green LED chip products in production are becoming increasingly important, and full-color LED chip manufacturers are gaining a competitive advantage. In light of the current market environment and to adapt to industry development trends and the new competitive landscape, Jucan Optoelectronics added a "2.4 million-piece annual production capacity red/yellow epitaxial wafer and chip project" and adjusted the implementation schedule of its "Mini/Micro LED chip R&D and manufacturing expansion project" accordingly.

Nevertheless, Jucan Optoelectronics will continue to fully promote the construction of its Mini/Micro LED chip R&D and manufacturing expansion project.

On December 17, 2024, according to Suqian Radio and Television Station, Jucan Optoelectronics' Mini/Micro LED chip production line officially started production in November. The production line has a planned annual capacity of 2.4 million LED chips, and the products are widely used in indoor large screen displays, plant lighting, new energy vehicles, AR displays and other fields.

To meet the growing market demand, Jucan Optoelectronics plans to expand the production capacity of its Suqian production line starting in June 2025, initially achieving a monthly output of 200,000 pieces, and further increasing it to 400,000 pieces per month from 2025 to 2026.

In terms of performance, in 2024, benefiting from the recovery in demand from commercial activities, cultural tourism, large-scale commercial performances, and sporting events, the market's end-user demand continued to recover. The company rapidly released its production capacity, accurately grasped market demand, and performed outstandingly in the sales of high-end products such as high-efficiency lighting, automotive lighting, and backlighting. It is estimated that the company will achieve a net profit attributable to the parent company of RMB 195 million to RMB 215 million in 2024, representing a year-on-year increase of 60.95% to 77.46%.

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