Advanced Semiconductor Engin-eering Inc (ASE, 日月光半導體), the world's biggest chip packager, yesterday signed an agreement with NXP Semiconductors to form a joint venture in Suzhou, China, to safeguard its position as market leader.
This is a further step by ASE in its efforts to build a greater presence in China's burgeoning semiconductor market following its acquisition of Shanghai-based chip testing and packaging firm Global Advanced Packaging Technology Ltd (
The new joint venture, 60 percent owned by ASE, is expected to start operations in the second quarter after first receiving the go-ahead from the Taiwanese government, according to a joint statement.
NXP, headquartered in the Netherlands, would hold 40 percent of the new company, the statement said, without disclosing detailed financial information. NXP was previously known as Philips Semiconductor, the chip unit of Royal Philips Electronics NV.
"We look forward to working together with NXP to strengthen our leadership position and bring additional value to our customers," ASE chief operating officer Tien Wu (吳田玉) said in the statement.
The joint venture with NXP would serve the international and domestic Chinese markets, focusing on testing and packaging of a wide range of semiconductors in areas such as mobile communications, consumer electronics and automotive products, the statement said.
"The deal will help ASE increase orders in the long run by establishing stronger alliances with customers such as NXP," said Tiffany Chen (
ASE has been attempting to enhance its operational efficiency by improving its customer portfolio and boosting the sales contribution from its 10 major clients, including Freescale Semiconductor Inc and Microsoft Corp.
The cooperation with NXP would also provide ASE with easier access to China's semiconductor market, Chen said.
ASE's rival, Siliconware Precision Industries Co (SPIL, 矽品精密), said on Thursday that it also expected to gain the government's approval to set up an operation in China in the first half of this year.
Separately, the US private equity fund consortium Carlyle Group is waiting for government approval of its buyout bid for ASE.
The Ministry of Economic Affairs said on Thursday that it would start reviewing the proposed deal after completing consultations with the relevant government agencies. It said the ministry's Investment Commission is still soliciting opinions on the deal.
On Wednesday, the private US-Taiwan Business Council called on the ministry to swiftly complete the review process for Carlyle's proposed buy-out.
The Washington-based business association said in a statement that this potential deal highlights the ability of Taiwanese companies to attract substantial foreign investments.
ASE shares inched up 0.26 percent to NT$37.45 yesterday, underperforming the primary TAIEX index's 0.98 percent gain. The share price of SPIL dropped 0.91 percent to NT$54.40.