(Yicai Global) Sept. 4 -- Focus Lightings Tech will invest CNY3.5 billion (USD511.5 million) to expand the production line for high-brightness light-emitting diode chips in its plant in Suqian in eastern China to meet growing market demand, the company said in a statement today.

Suzhou-based Focus Lightings’ stock [SHE:300708] skyrocketed 20 percent at CNY23.32 (USD3.41) this afternoon, its highest price in two years. The daily limit on the rise and fall of stocks on the Shenzhen Stock Exchange’s Growth Enterprise Market was raised to 20 percent from its original 10 percent starting Aug. 24.

Focus Lightings will build new mini/micro light emitting diode gallium nitride and gallium arsenide chip production lines near the Suqian plant, which will be completed and put into production 36 months after ground-breaking, according to its agreement with the local government, per the statement.

The new facilities cover 30,000 square meters, the statement said, without mentioning the estimated annual production capacity of LED chips. The plant’s current annual output is 13 million units and the project under construction is expected to produce an additional 9.5 million each year, according to the company’s first-half performance report released last month. It produced 6.35 million wafers in the first half.

It is unclear whether the LED chip capacity expansion project involved in the company’s private placement announced on Aug. 25 is part of the expansion project announced today or an independent one.

Focus Lightings plans to raise CNY1 billion via private placement and use CNY949 million to build a high luminous-efficacy LED chip expansion and upgrade project in Suqian, according to the private placement plan. The project is designed to produce 8.28 million high-end blue and green LED chips and 1.2 million mini LED chips per year and is expected to be finished and start running within 24 months after construction starts.

Focus Lightings’ main business is research and development, production and sales of LED epitaxial wafers and chips. Its main products are GaN-based high-brightness blue LED chips and epitaxial wafers. The company posted revenue of CNY1.1 billion last year, ranking fifth among Chinese LED chip manufacturers, public information shows.

An epitaxial wafer is a pane of semiconducting material made by epitaxy -- the growth of crystals on a crystalline substrate that fixes their orientation -- used in photonics, microelectronics, spintronics and photovoltaics. The epi layer may be the same material as the substrate, usually monocrystalline silicon.

Editor: Ben Armour