Identifier
Created
Classification
Origin
06BEIJING19682
2006-09-18 06:45:00
UNCLASSIFIED
Embassy Beijing
Cable title:  

PRE-LICENSE CHECK: D360560 XIAMEN CHANGELIGHT

Tags:  BEXP CH ETRD ETTC PREL 
pdf how-to read a cable
VZCZCXRO5519
RR RUEHCN RUEHGH RUEHVC
DE RUEHBJ #9682/01 2610645
ZNR UUUUU ZZH
R 180645Z SEP 06 ZFF4
FM AMEMBASSY BEIJING
TO RUCPDOC/USDOC WASHDC
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUEHGZ/AMCONSUL GUANGZHOU 1462
RUEHC/SECSTATE WASHDC 7198
RHEHNSC/NSC WASHDC
RUEAHLC/DEPT OF HOMELAND SECURITY WASHDC
UNCLAS SECTION 01 OF 02 BEIJING 019682 

SIPDIS

SIPDIS

USDOC FOR 532/BIS/OEA/TANDRUKONIS/MOBRIEN/LLAUCIUS
USDOC FOR 532/BIS/OEE/JSONDERMAN
USDOC FOR OIO/ADESSARAN
AMCONSUL GUANGZHOU FOR FCS AND POL/ECON
STATE FOR EAP/CM
STATE FOR EB/ESP
NSC FOR PROSTRATE
NSC FOR ASIA
DEPARTMENT OF HOMELAND SECURITY FOR ICE/NATIONAL SECURITY
UNIT

E.O. 12958: N/A
TAGS: BEXP CH ETRD ETTC PREL
SUBJECT: PRE-LICENSE CHECK: D360560 XIAMEN CHANGELIGHT

REF: USDOC 4139 (07/19/06)

UNCLAS SECTION 01 OF 02 BEIJING 019682

SIPDIS

SIPDIS

USDOC FOR 532/BIS/OEA/TANDRUKONIS/MOBRIEN/LLAUCIUS
USDOC FOR 532/BIS/OEE/JSONDERMAN
USDOC FOR OIO/ADESSARAN
AMCONSUL GUANGZHOU FOR FCS AND POL/ECON
STATE FOR EAP/CM
STATE FOR EB/ESP
NSC FOR PROSTRATE
NSC FOR ASIA
DEPARTMENT OF HOMELAND SECURITY FOR ICE/NATIONAL SECURITY
UNIT

E.O. 12958: N/A
TAGS: BEXP CH ETRD ETTC PREL
SUBJECT: PRE-LICENSE CHECK: D360560 XIAMEN CHANGELIGHT

REF: USDOC 4139 (07/19/06)


1. Unauthorised disclosure of the information provided below
is prohibited
by Section 12(c) of the Export Administration Act.


2. REFTEL requested a Pre-License Check (PLC) to be conducted
at the facilities of
XIAMEN CHANGELIGHT CO. LTD, No. 124 Chuang Ye Building,
Pioneering Park, Xiamen, China
(86-59-2392-1328) to determine the reliability of this
company to receive U.S.-controlled
items and technology. BIS License Application D360560 lists
XIAMEN CHANGELIGHT as the
potential ultimate consignee of arsine and phosphine
chemicals to be used in the metal
organic chemical vapor deposition process for manufacturing
semiconductor materials.
These items are classified under ECCN 3C004, valued at
$704,328, and are controlled
for national security reasons. AIRPORDUCTS AND CHEMICALS
INC., 7201 Hamilton Boulevard,
Allentown, PA 18195(619-481-6207) is the license applicant
and the intermediate consignee
is SANCHANG IMPORT AND EXPORT (SHANGHAI) CO. LTD, Room 451,
NQ 551 Lao Shan Cun,Pudong,
Shanghai, China (86-21-5888-5100).


3. On August 3, 2006, ECO requested that the Department of
Mechanical, Electrical
and High-Technology Industries of the Ministry of Commerce
(MOFCOM) arrange a pre-license
visit to XIAMEN CHANGELIGHT CO. LTD in accordance with the
Exchange of Letters on End-Use
Visit Understanding. On August 22, 2006, MOFCOM scheduled
this visit for August 25, 2006.


4. On August 25, 2006, ECO, accompanied by MOFCOM official
WEI Jie and ZHAO Fuping,
Xiamen Municipal Trade Development Bureau, High Technology
Department, conducted a
site visit at the premises of XIAMEN CHANGELIGHT CO. LTD, No.
124 Chuangye Building,
Xiamen Pioneering Park for Overseas Chinese Scholars, Xiamn,
Fujian Province, and
met with DENG Dianming, President and General Manger, and YE
Sunyi, Assistant General
Manager.


5. Mr. ZHAO and Mr. DENG disclosed that XIAMEN CHANGELIGHT is
a spin-off from XIAMEN
SAN AN ELECTRICAL COMPANY, which was previously the subject
of a post-shipment
verification visit. (COMMENT: Additional research by ECO
confirmed that on
October 26, 2004, at the request of BIS (USDOC 03899
(08/17/04),FCS-Beijing did
conduct a post-shipment verification (PSV) end-use check
relative to BIS export
license D315956 at the premises of XIAMEN ANMEI
OPTOELECTRONICS, which is a joint
venture between XIAMEN SAN AN ELECTRONICS CO. LTD and a U.S.
company, LANCASTER
RESOLVE TECHNOLOGIES, LLC, which is affiliatedwith VEECO.
Results of this earlier
favourable PSV were reported via cable from Beijing on
November 3, 2004.)
Mr. DENG and Mr. YE both worked at XIAMEN SAN AN ELECTRICAL
COMPANY during the
previous PSV and described that end-use check in detail.


6. Mr. DENG stated that he, Mr. YE, and three other private
investors whom he identified
as WANG Weiyong, WEN Menli and ZHENG Shun formed XIAMEN
CHANGELIGHT. Mr. DENG showed
ECO a copy of the business license, registration no.
3502002560395, and MOFCOM offical
WEI Ji provided ECO with a copy of this document. According

BEIJING 00019682 002 OF 002


to Mr. DENG, XIAMEN
CHANGELIGHT was started because his previous employer, XIAMEN
SAN AN ELECTRICAL COMPANY,
could not keep up with the demand for LED wafers. The core
business for XIAMEN
CHANGELIGHT will be the production of two-inch red/yellow LED
wafers. This compaQ
has yet to commence operations and the building is still
under construQon. Mr. DENG
anticipated starting operations in October with the first
wafer run targeted for
November, 2006.


7. XIAMEN CHANGELIGHT currently has ten employees and Mr.
DENG anticipates hiring up to
100 employees. In response to questioning by ECO, which was
based on a review of
statements made in company literature regarding "foreign
workers", XIAMEN CHANGELIGHT
does not currently have any non-Chiense employees. XIAMEN
CHANGELIGHT will use
technical teams from foreign companies to install, calibrate
and maintain equipment
purchased from overseas. Mr. DENG further advised that he
anticipates borrowing
20 to 30 thousand RMB from the bank but that equipment must
first be in place in
order to secure the loan. Mr. DENG stated that XIAMEN
CHANGELIGHT has purchased a
MOCVD tool from Germany, fault and gas detectors from
Honeywell, and a hydrogen
purifier from GenTech. Wafer blanks will be purchased from
AST - "Tumei".


8. Mr. DENG stated that XIAMEN CHANGELIGHT does not currently
have customers or
confirmed orders; as there are no domestic or international
standards for this product,
XIAMEN CHANGELIGHT must make sample LED wafers for
prospective customers to examine
before securing contracts.


9. ECO toured the facilities of XIAMEN CHANGELIGHT and
observed construction in progress.
The first two floors of the building will be the production
line with offices on the
third and fourth floors. ECO observed a 500 square metre
clean room in the process of
being constructed and noted air exchange and changing
facilities. XIAMEN CHANGELIGHT
is located in a new industrial park being developed by a
private company under the
direction of the Xiamen city government.


10. As part of this PLC, ECO requested, and MOFCOM and local
Xiamen government officials
agreed, to a drive-by visit of XIAMEN SAN AN ELECTRICAL
COMPANY, which is the parent
company of XIAMEN CHANGELIGHT and the end-user of
U.S.-controlled items exported under
BIS export license D314956 (see para. 5 above). This company
occupies a multi-
building campus with several thousand employees and appears
to be active.


11. RECOMMENDATION - FAVOURABLE. Based upon the information
available during this
Pre-License Check, ECO recommends XIAMEN CHANGELIGHT CO. LTD
as likely to be a reliable
recipient of U.S.-controlled items and technology as
described in REFTEL, to be used as
described above.

RANDT