Thu, Jan 29, 2004 - Page 10 News List

Infineon buys ADMtek for US$100 million in cash


German semiconductor company Infineon Technologies AG signed an agreement yesterday to acquire the local integrated circuit design firm ADMtek Inc (上元科技) for 80 million euros in cash (US$100 million).

Munich-based Infineon noted that it is the company's first acquisition of a controlling stake in a semiconductor company in Asia.

It said that a new company, Infineon-ADMtek Co Ltd, will be set up in Hsinchu to focus on developing broadband customer premise equipment (CPE) integrated circuits and will enable Infineon to enter the rapidly-growing home gateway market in the Asian region.

"ADMtek's complementary competencies and technologies will enable us to successfully compete in the broadband CPE market with a complete system solution," said Thomas Seifert, head of Infineon's Wireline Communications business group.

Infineon said the deal also calls for it to supply products to Accton Technology Corp (智邦科技), the largest stakeholder of ADMtek. Accton holds more than 20-percent stake in ADMtek.

"With Infineon's technology support, I believe ADMtek will be able to expand its product lines," said ADMtek chairman Ken Lu (盧崑瑞).

The 80-million euro deal means that every ADMtek share was priced at about NT$62 to NT$65, Lu said.

ADMtek is expected to report US$43.2 billion in revenues for last year, but that will only allow the company to break even, he said.

Accton shares rose by 5.82 percent to end at NT$30.9 each on the TAIEX yesterday.

Infineon said the venture will strengthen its leading position in the fast-growing, broadband access market segment and also provides Infineon with a strong research and development base, favorable costs, and proximity to the leading original design manufacturing companies of Taiwan.

The broadband access market has topped 100 million users, according to recent studies. These users want advanced broadband services and delivering these services requires a single, easy-to-use and inexpensive home gateway, said Seifert.

The acquisition is expected to be completed in April, subject to ADMtek shareholders approval and various government approvals, including the competent anti-trust authorities.

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