Chunghwa Picture Tubes Ltd (中華映管) yesterday said Compal Electronics Inc (仁寶) would subscribe to NT$7 billion (US$212 million) in new common shares via private placement, ending two weeks of speculation over candidates for a strategic partnership.
The announcement came as panel prices extended gains over the past months, indicating that the flat-panel industry may be recovering and triggering fresh capacity expansion by major players, including LG Display Co and AU Optronics Corp (友達).
In stead of following rival's step to expand capacity, Chunghwa Picture hopes the partnership with Compal "will help strengthen its cooperation with downstream customers and help it lift factory utilization as well as improve operation efficiency,” Chunghwa Picture said in a company statement released yesterday.
Compal, the world’s No. 2 contract maker of notebooks, will buy 2.8 billion shares of Chunghwa Picture for NT$7 billion, the statement said. The price of NT$2.5 per share would mean a discount of nearly 54 percent off the stock’s closing price of NT$5.43 yesterday. Compal shares rose 4.41 percent to NT$30.8.
With the investment, Compal will own an approximately 20 percent stake in Chunghwa Picture, making it the second-largest shareholder after Tatung Group (大同集團).
“The announcement somehow disappoints me. I had thought Chunghwa Picture would pick a bigger TV maker, probably from China, to be its new partner,” said Roger Yu (游智超), an industry analyst with Polaris Securities Co (寶來證券).
On July 8, Chunghwa Picture chairman Lin Wei-shan (林蔚山) said the company could wrap up talks with strategic partners “in a month or two,” resulting in a tie-up that could bring “explosive growth.”
But Yu was skeptical.
“The strategic alliance with Compal may not bring explosive growth for Chunghwa Picture,” he said, adding “it will help Chunghwa Picture secure stable orders as Compal needs the panels for assembling notebooks, mobile phones and other consumer electronic gadgets.”
Chunghwa Picture’s board yesterday approved a proposal to issue no more than 4 billion new common shares via private placement to raise NT$10 billion. The company said it would spend the new funds on operational costs, repaying bank loans and buying new facilities and equipment.
Tatung Group will buy the remaining 1.2 billion new shares via its affiliates. However, its stake in Chunghwa Picture will drop to around 34 percent from 36 percent once the new shares are issued.
Compal said the investment aimed to enhance the vertical integration of its notebook manufacturing supply chain to improve cost structure and operating efficiency.
Compal’s board yesterday also approved an investment of up to NT$1.745 billion in local telecom company Vibo Telecom Inc (威寶電信).
Quanta Computer Inc (廣達) chairman Barry Lam (林百里) is expected to share his views about the artificial intelligence (AI) industry’s prospects during his speech at the company’s 37th anniversary ceremony, as AI servers have become a new growth engine for the equipment manufacturing service provider. Lam’s speech is much anticipated, as Quanta has risen as one of the world’s major AI server suppliers. The company reported a 30 percent year-on-year growth in consolidated revenue to NT$1.41 trillion (US$43.35 billion) last year, thanks to fast-growing demand for servers, especially those with AI capabilities. The company told investors in November last year that
Intel Corp has named Tasha Chuang (莊蓓瑜) to lead Intel Taiwan in a bid to reinforce relations between the company and its Taiwanese partners. The appointment of Chuang as general manager for Intel Taiwan takes effect on Thursday, the firm said in a statement yesterday. Chuang is to lead her team in Taiwan to pursue product development and sales growth in an effort to reinforce the company’s ties with its partners and clients, Intel said. Chuang was previously in charge of managing Intel’s ties with leading Taiwanese PC brand Asustek Computer Inc (華碩), which included helping Asustek strengthen its global businesses, the company
Taiwanese suppliers to Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) are expected to follow the contract chipmaker’s step to invest in the US, but their relocation may be seven to eight years away, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. When asked by opposition Chinese Nationalist Party (KMT) Legislator Niu Hsu-ting (牛煦庭) in the legislature about growing concerns that TSMC’s huge investments in the US will prompt its suppliers to follow suit, Kuo said based on the chipmaker’s current limited production volume, it is unlikely to lead its supply chain to go there for now. “Unless TSMC completes its planned six
TikTok abounds with viral videos accusing prestigious brands of secretly manufacturing luxury goods in China so they can be sold at cut prices. However, while these “revelations” are spurious, behind them lurks a well-oiled machine for selling counterfeit goods that is making the most of the confusion surrounding trade tariffs. Chinese content creators who portray themselves as workers or subcontractors in the luxury goods business claim that Beijing has lifted confidentiality clauses on local subcontractors as a way to respond to the huge hike in customs duties imposed on China by US President Donald Trump. They say this Chinese decision, of which Agence