Monday, December 13, 2010

Silicon Dragon time: Taiwan LED maker places in race of China startups to NASDAQ

Add one more venture-backed IPO with a Greater China tagline to the stockpile accumulating on NASDAQ. This one comes from venture investor WI Harper and managing director Y.K. Chu, who led a $7.5 million financing in the firm three years ago. And, it's in red-hot energy savings sector--yes, you guessed it, another LED deal, SemiLEDs Corp.
I first interviewed the founder of SemiLEDs, Vietnamese native Trung Doan (see photo), in Taiwan about 18 months ago, and he related not only his own interesting international background and his growing number of patents, but the story of his firm's link to Boise, Idaho. Turns out that potato king J.R. Simplot helped to form and invested in SemiLEDs six years ago. We joked then that Boise may some day become known for a different type of chip, the kind that goes into LEDs.
Now, that day has come closr, thanks to the Dec. 9 debut of SemiLEDs on NASDAQ and its 52% increase in value on the opening day of trades. The IPO offered 5.3 million shares, priced at $17 each.
Unlike some mainland China deals that are going public with high valuations before turning a profit (read Youku), SemiLEDs is churning out profits from its operations-$10.8 million based on $35.8 million in revenues.
SemiLEDs has two plants in Taiwan and is ramping up operations in mainland China, leverage a Greater China strategy and presumably lower production costs. The six-year-old startup aims to triple its number of chips from a new, $350 million production facility in Foshan.
WI Harper, like other venture firms, is making a bet on LEDs as the light of the future. The firm has investments in two other Taiwanese firms in the LED business--NeoPac Lighting and Testar Electronics.