Print

Mail

wiki links

United Test not going to rush into Chinese market

United Test and Assembly Center Ltd, Singapore's No. 2 semiconductor testing and packaging house, said yesterday it is in no rush to tap into the emerging Chinese semiconductor market.

"The Chinese market indeed has the potential to grow in the future. But it is still in the start-up stage and needs more observation. There's no need to rush," United Test chief executive Lee Joon Chung (李永松) said at a press conference in Taipei.

Last year, United Test spent nearly US$5 million on setting up a base in Shanghai for engineering services at the request of its US and European customers.

"We won't rule out the possibility of increasing investments in thriving markets. But at the moment, we do not have a plan to rapidly expand [our capacity in China]," company chairman Charles Chen (陳致遠) said.

Lee and Chen were in Taipei yesterday to brief the local media about the Singaporean company's planned acquisition of Taiwan's testing house UltraTera Corp (UTC, 聯測科技).

United Test announced on Wednesday that with the semiconductor sector on the rise, it would acquire UltraTera in a share swap worth US$475.77 million in order to expand its market presence in Taiwan.

The company will exchange 1.6 United Test shares for one share in the Hsinchu-based UltraTera, the company said.

Based on United Test's Tuesday closing price, the price offered for UltraTera in the share swap is a 49-percent premium on its Tuesday closing price on the Gretai Securities Market (櫃檯買賣中心), the over-the-counter market in Taiwan.

UltraTera will become a fully-owned unit of the Singaporean company when the deal is completed in September.

UltraTera provides testing services to semiconductor heavyweights such as Hynix Semiconductor Inc and flash-memory card giant SanDisk Corp.

China's consumption of semiconductors for computers is expected to grow to US$18.5 billion in 2008, growing at an average annual rate of 20 percent over last year's US$7.3 billion, market researcher iSupply Corp said in a report last week. By 2008, China will account for about 28 percent of worldwide semiconductor consumption for computers, iSupply said.

But the Chinese market is still several steps away from maturity, as major chipmakers Semiconductor Manufacturing International Co (SMIC, 中芯國際集成電路) and Grace Semiconductor Manu-facturing Co (宏力半導體) have only recently started massive wafer production there, said UltraTera president Tsai Chung-cher (蔡宗哲).

Echoing Tsai's view, Patrick Wang (王文宏), an analyst with Yuanta Core Pacific Capital Management (元大京華投顧), said, "It will never be too late for chip testers to start Chinese operations, as long as most of their customers remain in Taiwan."

However, industry leaders have urged the government to allow local firms to set up factories in China.

Advanced Semiconductor Engineering Inc (日月光) and Siliconware Precision Industries Co (矽品) fear losing competitiveness to international rivals such as Technologies Inc.
This story has been viewed 2566 times.