CMC to spend US$12m to set up optoelectronics firm

CMC Magnetics Corp (CMC, 中環), the world's second-biggest manufacturer of recordable compact discs (CD-Rs), yesterday said its board had approved a proposal to spend a maximum of NT$400 million (US$12.1 million) to set up an optoelectronics affiliate as part of its latest diversification efforts.

CMC said the new affiliate would produce a wide range of optoelectronics products. No further details were released yesterday.

CMC shares rose nearly 1 percent to NT$15.2 yesterday, compared with local rival Ritek Corp's (錸德科技) 0.1 percent dip to NT$9.49 and the benchmark TAIEX's 0.11 percent gain, primarily owing to CMC's rising contributions from its affiliates.

CMC set up a solar cell manufacturing unit, Sunwell Technology Corp (富陽光電), late last month, joining several other local electronics manufacturers in tapping into the rapidly growing industry.

CMC's touch-panel manufacturing venture with Japan's Fujitsu Co Ltd, Transtouch Technology Inc (富晶通), was also in the spotlight recently as demand for such screens is expected to rise after Apple Inc's release of the iPhone.

CMC posted a net income of NT$211 million in the first quarter of the year, up 22 percent from a year ago. It has not yet reported second-quarter results.

Ritek yesterday reported a net income of NT$51.81 million for the first six months of this year on slowing demand.

Separately, CMC's board yesterday also approved a plan to inject an additional US$8.64 million into a unit in Jiangsu Province, China. The investment aims to expand production to meet demand for CD-Rs in China, the company said in a statement submitted to the Taiwan Stock Exchange.