Fri, Nov 07, 2014 - Page 15 News List

JCET, Temasek said to agree on Stats purchase

Bloomberg

Jiangsu Changjiang Electronics Technology Co (JCET, 江蘇長電科技), China’s biggest chip tester, entered into an agreement with Temasek Holdings Pte about buying control of unprofitable Singaporean competitor Stats ChipPac Ltd, people with knowledge of the matter said.

JCET is set to begin 30-day exclusive talks to buy the state investment company’s 84 percent stake in Stats ChipPac, said one of the people.

The holding is valued at S$1.1 billion (US$829 million) at the current share price.

The purchase of Stats ChipPac, the world’s fourth-largest provider of chip packaging and testing, would add to the US$26 billion of semiconductor deals in the past year, according to data compiled by Bloomberg.

Beijing has pledged financial support to the nation’s chip industry in seeking to reduce reliance on foreign companies for key technologies.

Stats ChipPac was suspended from Singapore trading on Nov. 3, the same day JCET’s shares were halted in Shanghai.

Tianshui Huatian Technology Co (天水華天科技), another Chinese chip tester, said on Aug. 29 that it dropped out of talks on a possible takeover of Stats ChipPac. Advanced Semiconductor Engineering Inc (ASE, 日月光半導體), the world’s biggest chip assembler and tester, had also previously considered an acquisition, people familiar with the matter said in August.

Shares of Stats ChipPac have risen 73 percent since May 14, two days before the company first said it received an approach from an unnamed bidder.

They are still down more than 90 percent from their March 2000 peak.

China’s major semiconductor testing companies increased sales an average of 18 percent annually from 2008 to 2012, compared with the 9 percent yearly growth by the top companies globally, Sanford C Bernstein & Co analysts led by Mark Li wrote in a report in September last year.

JCET, based in Jiangyin in eastern China, is the nation’s largest by sales and has more advanced technology than its local competitors, according to Bernstein.

Stats ChipPac customers include Samsung Electronics Co, Qualcomm Inc and Texas Instruments Inc, according to data compiled by Bloomberg.

It reported a net loss of US$41.4 million last year, its second in the past three years, as sales fell 6.1 percent to US$1.6 billion, the data showed.

The Singapore-based company had a 6.4 percent share of the semiconductor assembly and testing services market last year from a field of more than 150 suppliers, trailing ASE Group with 18.9 percent, research firm Gartner Inc said on April 30.

It was the only top-four provider to post a decline in revenue last year, according to Gartner.

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