Advanced Semiconductor Engineering Inc (
The two companies will invest US$800 million over five years to expand capacity after combining their production of so-called substrates, Kaohsiung-based Advanced Semiconductor and Taoyuan-based Compeq said in a statement.
The investment adds to signs of a rebound in the global semiconductor industry following a near three-year slump. The companies, which count Nokia Oyj and Motorola Inc, the world's largest handset makers, among their customers, are targeting US$500 million in annual sales for the venture within five years.
Advanced Semiconductor shares rose NT$1.70, or 5.5 percent, to NT$32.70 yesterday.
Advanced Semiconductor will own 60 percent of the venture with Compeq, a maker of the printed circuit boards that hold semiconductors, holding the remainder.
The partners are aiming for a third of the market in 2007 for substrates, which allow chips to be implanted within circuit boards instead of on top, saving space and allowing portable devices such as cell phones to be made smaller.
The companies said they expect their combined substrate capacity to reach US$1.3 billion in four years.
The venture will start production at an existing Compeq plant in Taoyuan. Compeq also supplies circuit boards to cellphone makers such as Siemens AG and smaller rivals in China, where it has shifted most of its manufacturing.
Advanced Semiconductor will start its first production of substrates in China in the first half next year, a Chinese-language newspaper reported, citing company chairman Jason Chang (
Advanced Semiconductor, said second-quarter profit rose almost fivefold to NT$360 million (US$10.5 million).
Compeq's second-quarter loss narrowed by two fifths to NT$342 million from the same period last year.
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