The share conversion ratios of the two companies are tentatively set at one share of Epistar for 0.5 ordinary share of company A, and one share of Lextar for 0.275 ordinary share of company A. Acting as III-V semiconductor investment platform, Company A is committed to flourishing current businesses of Epistar and Lextar and exploring advanced technologies for applications including mini/micro-LED display, intelligent sensing and III-V semiconductor microelectronics fields. While the company A will lead to strengthen the global competitiveness of both companies, Epistar and Lextar will operate independently and there will be no impact on their respective customers and employees.

Expertise, Collaboration, and Synergy

The synergy of this collaboration include the following: (1) to integrate the resources and to refocus expertise of two companies. In the new era, Epistar will focus on LED upstream and midstream technology with Lextar becoming one of its valuable customers and Lextar will concentrate in-depth on downstream technologies with Epistar being one of its strategic suppliers, (2) to reinforce the connection between resources and product/technology development for faster commercialization, and to maximize the benefit with efficient investment and cost management, (3) to urge the application of mini/micro-LED technology to benefit customers, partners and consumers.

In the future, the two parties will jointly create a new milestone in the III-V compound semiconductor industry through this collaboration.

Corporate Governance of Company A

The daily operation of company A will be coordinated and decided by the Steering Committee jointly established by both parties. Each of Epistar and Lextar will have two representatives sitting in the Committee.

Focus, Complement and Optimization

Dr. B.J. Lee, Chairman of Epistar, said in terms of display application, LED technology has to not only win out in the competition, but also widen the gap to be ahead of other competing technologies within the shortest time. In other words, at this critical moment, the LED industry needs more collaboration than ever. In the future, company A will manage and plan overall operation to leverage the resources effectively and to develop the collaboration strategy for the industry in a macro view so all subsidiaries of company A can evolve on this platform.

Patrick Fan, President of Epistar, said that Epistar will continue to concentrate on the upstream and midstream of LED to provide better products and services in this collaboration while Lextar will focus on the downstream products and become one of Epistar’s important customers. This will not only contribute to the overall supply chain, but also accelerate the application development, so that consumers can enjoy the advantage of miniaturization of LED that can improve visual quality of displays for daily life.

Dr. David Su, Chairman and CEO of Lextar, said that the products of Lextar span the upstream, midstream and downstream of the industry. The company has not only the talents of each process platform, but also the capability of T.E.M.P. (Thermal, Electrical, Mechanical, Photo-electrical) integration. In the same time, Lextar has the advantage of retaining downstream customers and being close to the market. As the deepening of the collaboration, Epistar will become a strategic partner of Lextar for LED dies and Lextar will focus on the development of packaging and modular technologies to provide prompt services to worldwide customers.

Company A will integrate the advantage of Epistar and Lextar to create synergy in the collaboration. We believe company A will bring more values to the desires of mini/micro-LED display and 5G ecology in the future, thus generating a positive contribution to shareholders' rights and interests of both companies.