Powertech Technology Inc (PTI, 力成), which provides packaging and testing services for memorychip makers, has reached an agreement with Nepes Corp to acquire the South Korean firm’s Singaporean unit.
The Singapore-based Nepes Pte Ltd has the capacity to turn out 15,000 units of 300mm (12-inch) wafer bumping and wafer-level packaging a month, and counts US chipmaker Broadcom Corp as one of its major customers.
The deal is part of Powertech’s efforts to bolster its capacity in advanced logic integrated circuit (IC) packaging to complement the company’s plan to raise its capital expenditure to between NT$6 billion and NT$7 billion (US$198.3 million and US$231.3 million) this year from NT$5 billion.
The increase is to finance new investments on NAND flash and wafer bumping, the company said in a statement on Tuesday, without disclosing the price it will pay to acquire the Singaporean unit.
“With Nepes Pte’s well-established turnkey solution and its strategic location, this acquisition will elevate Powertech Technology into a new stage of growth,” the Hukou (湖口), Hsinchu County-based company said in the statement.
Powertech said Nepes Pte is the only 12-inch wafer bumping company in the Southeast Asian city-state that can efficiently provide customers with a complete cost and time turnkey solution.
In addition, its strategic location in Singapore will help Powertech better support its customers in the region, chairman Tsai Du-kung (蔡篤恭) said in the statement.
The Nepes deal follows Powertech’s purchase of struggling US-based OCZ Technology Group’s solid-state drive (SSD) packaging operations in Taoyuan County’s Jhongli City (中壢) earlier this year.
That acquisition was made as Powertech began carrying out SSD packaging for client Toshiba Corp.
Powertech, whose customers also include Kingston Technology Co of the US, on Tuesday reported financial results for the first quarter that exceeded expectations, with its net income rising 110.4 percent from the previous quarter to NT$597 million, but declining 4.6 percent from a year earlier, with earnings per share of NT$0.78, the company said on its Web site.
Its consolidated revenue last quarter totaled NT$9.23 billion, down 3.8 percent quarterly, but up 0.2 percent annually, while its gross margin stood at 14.1 percent.
Powertech said the outlook for this quarter looks positive, with strong demand expected for commodity and mobile DRAM, as well as for NAND flash, logic IC and wafer bumping.
The firm’s management has forecast sales to rise by a higher-than-expected 10 percent sequentially, with its gross margin also set to improve further, the report said.
SinoPac Securities Investment Service Co (永豐投顧) said in a note on Wednesday that stable margin improvement and new business opportunities could push Powetech’s revenue up 10 percent sequentially to NT$10.15 billion this quarter and raise its net income 23.1 percent to NT$740 million, which would equal earnings per share of NT$0.94.
Powertech has a “buy” rating at SinoPac and a new target share price of NT$55, which represents a 13-percent upside from its closing price of NT$48.85 on Wednesday.
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