Wed, Aug 15, 2012 - Page 13 News List

MediaTek on track to buy 48 percent of MStar

CHIP MERGER:The handset chipmaker said it had also received its board’s approval to acquire 100 percent of the TV chip supplier. Shareholders will vote on Oct. 12

By Lisa Wang  /  Staff reporter

MediaTek Inc (聯發科) yesterday said it had reached its goal of buying a 48 percent stake in rival MStar Semiconductor Inc (晨星半導體), the first stage in its plan to fully acquire the TV chip supplier by Jan. 1.

MediaTek chief financial executive David Ku (顧大為) said that Mstar shareholders had agreed to sell 79.69 percent of their shareholdings in MStar — far exceeding MediaTek’s aim to buy a 48 percent stake by Monday’s deadline.

“That means most shareholders accept the merger,” Ku said, adding that MediaTek would start to book MStar’s revenue and net profit next month.

MediaTek’s board yesterday also approved its plan to acquire 100 percent of MStar. The merger proposal will be voted on at an extraordinary shareholders’ meeting on Oct. 12. In total, MediaTek will pay about NT$115 billion in cash and stock for the acquisition.

On July 31, MediaTek said it expected revenue in the current quarter to grow by 13 percent to 18 percent sequentially to between NT$26.5 billion and NT$27.7 billion, boosted by strong demand for its smartphone chips.

The company also raised its full-year forecast for smartphone chips to 95 million units, from 75 million units, as smartphone chip shipments are expected to rise to 30 million units this quarter, from 21 million units last quarter, president Hsieh Ching-jiang (謝清江) said on July 31.

At that time, MediaTek did not factor in MStar’s contribution in the third-quarter guidance.

“We will stick to this forecast. The third quarter is a seasonally high period,” Ku said yesterday.

Eric Chen (陳慧明), a semiconductor industry analyst with Daiwa Capital, said MediaTek would be one of the biggest beneficiaries from the fast-growing smartphone market in China, which is expected to rise to 200 million units this year.

MediaTek expects to seize 40 percent to 45 percent of China’s smartphone and 3G handset chip market this year, a spike from last year’s 20 percent, Chen said.

MStar, the world’s biggest supplier of chips for LCD TVs, also stood by its outlook for the third quarter.

“The company’s operations will improve gradually in the third quarter. We hold a cautiously optimistic view,” chief executive official Lin Han-fei (林瀚飛) said yesterday. “The business will be in line with the seasonal pattern.”

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