Advanced Semiconductor to buy NEC assembly unit

Advanced Semiconductor Engineering Inc (日月光半導體), the world's second-largest chip packager, said it agreed to buy NEC Electronics Corp's assembly and testing operations.

Advanced Semiconductor will complete the purchase of NEC's IC packaging and testing division in May, the companies said in a statement. Kaohsiung-based Advanced Semiconductor agreed to buy NEC's operations for about US$40 million, a person involved in the transaction said earlier.

The purchase will spur sales at Advanced Semiconductor by at least US$100 million this year, the person said, asking not to be identified.

Credit Suisse First Boston is advising both companies on the transaction, Advanced Semiconductor spokesman Freddie Liu (劉英武) said, without elaborating.

The two companies said today they plan to discuss further cooperation in the future. Advanced Semiconductor expects to win orders from the seller of the chip-assembly business as well as from other chipmakers in Japan, Joseph Tung (董宏思), the company's chief financial officer, said on Monday.

Advanced Semiconductor yesterday reported a third straight quarter of profit as sales climbed by two-fifths on stronger demand from companies that make cell-phones and other telecommunications equipment.

Net income was NT$2.1 billion (US$30 million) for the three months ended Dec. 31, compared with a loss of NT$28.9 million a year ago.

Kawasaki-based NEC Electronics is the world's largest maker of chips for mobile-phone screens.