Mon, Dec 11, 2017 - Page 16 News List

Win to sell 4% stake to Avago

By Lisa Wang  /  Staff reporter

Win Semiconductors Corp (穩懋), the world’s largest pure-play gallium arsenide (GaAs) foundry, on Friday said it has agreed to sell 20 million shares to Avago Technologies General IP (Singapore) Pte for about NT$5.54 billion (US$184.57 million) via a private placement.

The share sale would make Avago a strategic investor owning about a 4 percent stake in Win and would help strengthen the partnership between the two companies, Win said.

In a filing with the Taiwan Stock Exchange, Win said it would sell 20 million new common shares to Avago at NT$277 each between Saturday and Dec. 22.

The price represents a 3.15 percent discount compared with the company’s closing share price of NT$286 on Friday on the Taipei Exchange.

The Taoyuan-based company said it plans to use the proceeds to finance its capital spending, boost research and development activities and replenish its operating capital.

The chipmaker has spent NT$2.53 billion on capital expenditures in the first three quarters of this year, according to a presentation document released on the company’s Web site following its quarterly earnings conference in October.

In the document, the company did not disclose its full-year budget for capital spending.

Local media on Friday reported that the number would exceed NT$3 billion, citing the company.

Win has also inked a memorandum of understanding with Avago to acquire a batch of manufacturing equipment for up to US$37 million from the Singaporean firm’s heterojunction bipolar transistor (HBT) production lines, a separate stock exchange filing released on Friday said.

Based on the agreement, Win said it had secured all foundry orders from the HBT production lines, which “will have a positive effect on both companies,” the filing said.

Win provides foundry services for GaAs components used in mobile applications, including smartphones.

The company’s main products include power amplifier (PA) chips, Wi-Fi-linked components and infrastructure-related applications, such as those for base stations, optical fiber networks, satellite communications and national defense applications.

The company has surpassed its peers by patenting its own process technology and is already capable of making 5G PA chips, giving it a lead over its rivals, analysts say.

The company in October forecast that revenue this quarter would grow by a low double-digit percentage from a historic high of NT$4.4 billion last quarter, supported by strong customer demand, while gross margin was expected to stay flat at 37.8 percent from the third quarter.

Net income last quarter rose 16 percent annually to NT$1.16 billion with earnings per share of NT$2.93, which exceeded market expectations, thanks to seasonally stronger smartphone demand, non-operating gains and growing contribution from its vertical-cavity surface-emitting laser, which is a semiconductor-based laser diode and a major lighting source for 3D sensing.

In the first three quarters of the year, the company’s net income totaled NT$2.39 billion, up 6 percent year-on-year, with earnings per share of NT$6.02.

Win shares have risen 214.63 percent this year, compared with the over-the-counter bourse’s 15.36 percent increase over the period, Taipei Exchange data showed.

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