Private equity funds’ investment in Taiwan last year reached a high of US$3.7 billion, up 105 percent from US$1.8 billion in 2019, as more funds invested in semiconductors and renewable energy amid low interest rates, the Taiwan Mergers and Acquisition and Private Equity Council (MAPECT, 台灣併購與私募股權協會) said on Wednesday.
Although most of the 21 deals that closed last year were conducted by venture capital funds and were comparatively smaller in terms of investment, some were large, iconic deals, MAPECT said in a report.
MagiCapital Group Ltd (東博資本) spent US$426 million to purchase all shares of On-Bright Electronics Inc (昂寶), a China-based chipset maker and Lite-On Technology Corp (光寶科技) affiliate, and US$138 million to acquire MediaTek Inc (聯發科) subsidiary Ili Technology Corp (奕力), a flat panel driver IC designer, the report said.
The target firms have both faced challenges in the past few years, with On-Bright posting slower revenue growth and lower gross margin due to market competition, and Ili Tech contending with limited room for growth due to intense competition, the report said.
MagiCapital is expected to support the firms and help them adjust strategies, it said.
MagiCapital, which focuses on Taiwan and China, has targeted the domestic semiconductor sector since 2019 and was one of the most active private equity funds in Taiwan last year, the report said.
The biggest private equity fund investment last year was a joint US$2.67 billion investment in Orsted A/S’ Greater Changhua 1 project by Cathay PE, a private equity fund of Cathay Securities Investment Trust Co (國泰投信), and institutional investor Caisse de depot et placement du Quebec, the report said.
Also in the renewable energy sector, AMP Capital Investors Ltd last year invested US$138 million in Swancor Renewable Energy Co (上緯新能源) to help build the Formosa II wind farm, and BlackRock Real Assets invested US$236 million in New Green Power Co (永鑫能源), a photovoltaic systems company, the report said.
“The nation’s green energy projects attracted more attention from private equity funds last year than in the past few years. This change could partially be attributed to the fact that these power projects would generate stable revenue for many years and investors want to take hold of long-term investment opportunities,” the report said.
In a low-interest rate environment with high volatility in stocks markets, investment projects that generate stable income were favored by many investors, the report said.
Besides the semiconductor and green energy sectors, telecom, biotech and food sectors were other investment targets of private equity funds last year, it said.
Hong Kong authorities ramped up sales of the local dollar as the greenback’s slide threatened the foreign-exchange peg. The Hong Kong Monetary Authority (HKMA) sold a record HK$60.5 billion (US$7.8 billion) of the city’s currency, according to an alert sent on its Bloomberg page yesterday in Asia, after it tested the upper end of its trading band. That added to the HK$56.1 billion of sales versus the greenback since Friday. The rapid intervention signals efforts from the city’s authorities to limit the local currency’s moves within its HK$7.75 to HK$7.85 per US dollar trading band. Heavy sales of the local dollar by
Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) revenue jumped 48 percent last month, underscoring how electronics firms scrambled to acquire essential components before global tariffs took effect. The main chipmaker for Apple Inc and Nvidia Corp reported monthly sales of NT$349.6 billion (US$11.6 billion). That compares with the average analysts’ estimate for a 38 percent rise in second-quarter revenue. US President Donald Trump’s trade war is prompting economists to retool GDP forecasts worldwide, casting doubt over the outlook for everything from iPhone demand to computing and datacenter construction. However, TSMC — a barometer for global tech spending given its central role in the
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
PRESSURE EXPECTED: The appreciation of the NT dollar reflected expectations that Washington would press Taiwan to boost its currency against the US dollar, dealers said Taiwan’s export-oriented semiconductor and auto part manufacturers are expecting their margins to be affected by large foreign exchange losses as the New Taiwan dollar continued to appreciate sharply against the US dollar yesterday. Among major semiconductor manufacturers, ASE Technology Holding Co (日月光), the world’s largest integrated circuit (IC) packaging and testing services provider, said that whenever the NT dollar rises NT$1 against the greenback, its gross margin is cut by about 1.5 percent. The NT dollar traded as strong as NT$29.59 per US dollar before trimming gains to close NT$0.919, or 2.96 percent, higher at NT$30.145 yesterday in Taipei trading
RSS