Mon, Jan 01, 2018 - Page 16 News List

M&A to further lift Sigurd revenue

NEW YEAR, NEW LINES:Sigurd has budgeted NT$1.6bn to spend on expanding its product lineup, focusing on strong growth segments such as cryptocurrency and AI

By Lisa Wang  /  Staff reporter

Chip testing and packaging service provider Sigurd Microelectronics Corp (矽格) on Thursday said its revenue and earnings could increase further this year on returns from mergers and acquisitions (M&A).

Sigurd expressed optimism after the company expanded its scale and broadened its product portfolios through two major acquisitions over the past two years.

The company in September secured a controlling stake of about 51 percent in local chip packager Winston Semiconductor Co (台星科) for NT$1.62 billion (US$54.27 million), a deal that helped Sigurd obtain wafer-level packaging technologies.

The company in 2016 completed its acquisition of smaller rival Test-Serv Inc (誠遠) for NT$1.4 billion.

The synergy benefits boosted its revenue 42.6 percent annually to NT$754 million in October and another 63.77 percent year-on-year to NT$829 million in November, Sigurd said.

“This year, we aim to increase our revenue to top NT$10 billion as the effect of M&A grows,” Sigurd chairman Sidney Huang (黃興陽) told an investors’ conference arranged by KGI Securities Co (凱基證券) in Taipei.

In the first 11 months of last year, the company’s cumulative revenue totaled NT$6.093 billion, up 15.64 percent year-on-year.

Sigurd, which counts the nation’s biggest handset chip designer, MediaTek Inc (聯發科), as one of its major customers, is headquartered in Hsinchu County’s Jhudong Township (竹東).

Chief operating officer Charles Yeh (葉燦鍊) said the demand for high-end chip testing and packaging services would continue to grow as semiconductor companies use more sophisticated processes to produce chips.

Sigurd has budgeted NT$1.6 billion in capital spending for this year to expand its product lineup, according to a presentation document released by the company.

About NT$300 million of the outlay is to be used to add wafer-level packaging equipment and high-end chip testing machines, the document shows.

With the investment, Sigurd expects its wafer-level capacity to increase between 10 and 20 percent.

The new equipment is to be used to target market segments with strong growth potential, such as high-end smartphones, cryptocurrency-related applications, artificial intelligence (AI) chips, chips used in cars, virtual reality devices and augmented reality applications, Yeh said.

Sigurd also plans to strengthen its position in China to seize emerging opportunities there.

The company is in talks with a number of Chinese top-10 chip companies about potential partnerships this year, Huang said, adding that early results from such talks could crystalize in the second half of the year.

“China is the world’s biggest chip market. More than 20 chip plants are under construction as its government is subsidizing local firms’ capacity-building to boost domestic supply,” Huang said.

Sigurd operates a small-scale plant in Wuxi in China’s Jiangsu Province.

Revenue from the Chinese market contributed 10 percent to the company’s total revenue last year, the company said.

In the first three quarters of last year, Sigurd reported NT$560 million in net profit, with earnings per share of NT$1.56.

Shares in Sigurd last year rose 41.42 percent on the Taiwan Stock Exchange, higher than the 15.01 percent average rise on the main bourse.

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