Asustek approved to buy uPI stakes

Staff writer, with CNA

Fri, Apr 20, 2012 - Page 11

The Fair Trade Commission said yesterday that it had approved an application filed by PC vendor Asustek Computer Inc (華碩) to acquire a stake in local integrated circuit (IC) developer uPI Semiconductor Corp (力智), as the deal would not hamper market competition.

In February, Asustek announced its intention to acquire a 49.5 percent stake in uPI for NT$438 million (US$14.84 million), raising its stake in the IC developer to 53 percent.

Upon completing the acquisition, the PC vendor is also expected to control the board of directors of uPI and take more than half of its supervisor seats.

Under the Fair Trade Act (公平交易法), a transaction that would result in the acquirer holding a stake of more than 33.3 percent in the company to be acquired, or taking more than half of the director and supervisor seats, requires review.

The commission said the acquisition deal is a vertical integration, since Asustek’s main products are notebook computers, desktop computers and motherboards, while uPI’s major product is analog ICs.

Even after the acquisition, Asustek is unlikely to stop its purchases of analog ICs from abroad, so market competition is not expected to be undermined, the commission said.

In a related development, the US International Trade Commission (ITC) said on Wednesday that it has voted to investigate patent infringement accusations against Asustek and smartphone maker HTC Corp (宏達電).

The ITC said in a statement that Pragmatus AV, LLC, a US-based patent holding company, filed a complaint in March, alleging that Asustek and HTC infringed on its technology used in certain consumer electronics products, such as mobile phones and tablet computers.

The US-based units of Asustek and HTC, as well as LG Electronics Inc and Samsung Electronics Co of South Korea, were named as respondents in the complaint, the USITC said.

The Science and Technology Policy Research and Information Center at Taiwan’s National Applied Research Laboratories said that Pragmatus, which was established in June 2010, has also taken legal action against Facebook, YouTube, LinkedIn and Photobucket.com for alleged patent infringements.