Ta Chen Stainless Pipe Co (大成不銹鋼) yesterday said it plans to acquire Alumax Mill Products Inc for US$350 million in cash to increase its aluminum manufacturing capacity in the US and bypass heavy tariffs.
The acquisition of Alumax’s Texas plant would boost Ta Chen Stainless’ aluminum capacity by 11,000 tonnes per month, the company said.
The transaction is be completed in the second quarter of next year.
“US President Donald Trump’s imposition of steel and aluminum tariffs was a catalyst for this deal,” Ta Chen Stainless president Robert Shieh (謝榮坤) told a media briefing in Taipei.
“Ta Chen Stainless has been distributing imported [aluminum] in the US for the past 20 years,” he said. “With the manufacturing capacity [of Alumax], the company will build a complete aluminum supply chain in the US and be protected” from the tariffs.
Trump’s so-called “232 tariffs” were named for Section 232 of the Trade Expansion Act of 1962, which allows the US president to restrict imports for national security. Trump is to levy 10 percent tariffs on aluminum and 25 percent on steel imports from several of the US’ trading partners, including Taiwan.
The deal would also help Ta Chen Stainless reverse its disadvantageous position: It would benefit from the tariffs and anti-dumping investigations, Shieh said.
The Tainan-based firm would continue to explore opportunities to expand its capacity in the US, he said, adding that it is close to raising NT$20 billion (US$652.45 million) via a fundraising project to finance its overseas expansions.
Ta Chen Stainless manufactures stainless products in Taiwan and California, after it acquired Outokumpu Stainless Pipe Inc last year.
Alumax, which has 90 employees, originally made aluminum for cars and the aerospace industry, but a lack of competitiveness has idled its factory, Shieh said.
Ta Chen Stainless’ board of directors yesterday approved the Alumax acquisition via a newly formed subsidiary, TCI Texarkana Inc, which is fully owned by Ta Chen Stainless’ US subsidiary Ta Chen International Inc (TCI, 美國大成國際).
TCI is the biggest wholesaler of aluminum products in the US, with an 85 percent market share following the acquisitions of Galex Inc and Empire Resources Inc last year, the Ta Chen Stainless said.
About 89 percent of Ta Chen Stainless’ revenue of NT$64.42 billion came from the US last year, its annual report showed.
Aluminum products accounted for 39 percent of revenue, up from 26 percent in 2016, the report showed.
Aluminum products were the second-biggest revenue source after stainless products (43 percent), it added.
Ta Chen Stainless said it plans to use its cash flow generated by TCI and its bank savings to fund the Alumax acquisition.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts