Siliconware Precision Industries Co Ltd (SPIL, 矽品精密) and its subsidiary ChipMOS Technologies Inc (南茂) yesterday agreed to each sell a 25 percent stake to China’s Tsinghua Unigroup Ltd (清華紫光) for a combined NT$68.7 billion (US$2.084 billion) in a bid to improve their position in China’s fast-growing semiconductor market.
SPIL plans to offer 1.03 billion new common shares to Tsinghua Unigroup at NT$55 per share, representing about a 21 percent premium compared with SPIL’s closing price of NT$45.5 yesterday.
After the transaction, Tsinghua Unigroup would be the biggest stakeholder of SPIL, surpassing Advanced Semiconductor Engineering Inc’s (ASE, 日月光半導體) 19 percent stake after the share dilution.
Photo: CNA
SPIL, the world’s third-largest chip tester and packager, expects the alliance with Tsinghua to help it fend off the threat of a takeover by bigger rival ASE.
In October, shareholders voted against SPIL’s share-swap proposal with Hon Hai Precision Industry Co (鴻海精密) to counter ASE’s bid.
“The strategic alliance with Tsinghua Unigroup will assist SPIL to maintain its current customers and help the company win new orders from Tsinghua Unigroup’s semiconductor subsidiaries,” SPIL chairman Bough Lin (林文伯) told a media briefing.
Photo: CNA
RDA Microelectronics Inc (銳迪科技) and handset chipmaker Spreadtrum Communications Inc (展訊) are two of the Chinese firm’s subsidiaries.
“The Tsinghua Unigroup deal will also help SPIL expand its business in the world market and in the Chinese market,” Lin said. “China is one important part of the global market.”
Lin said SPIL plans to use a bulk portion of the NT$56.8 billion proceeds to expand to advanced technology capacities and build a research and development center in Taiwan.
The deal still needs shareholder approval at an extraordinary shareholders’ meeting on Jan. 28, as well as regulatory approvals from government agencies, including the Investment Commission.
Tsinghua plans to submit an application to the commission by the end of next month, aiming to complete the transaction in the first half of next year, Lin said.
Tsinghua offered NT$11.9 billion to subscribe to 299 million new common shares issued by ChipMOS, which supplies testing and packaging services for LCD drive ICs and CMOS sensors.
“With Tsinghua Unigroup’s capital and resources, ChipMOS will be able to expand its technologies and business landscape,” ChipMOS chairman S.J. Cheng (鄭世杰) told a separate media briefing yesterday.
“Tsinghua Ungroup has made approaches since last year, with China seeking to greatly expand its semiconductor presence,” Cheng said.
After the deal, the Chinese company would become the second-biggest stakeholder of ChipMOS, while SPIL’s holding would drop to about 10 percent.
The latest deals came after Tsinghua announced in October to buy a 25 percent stake in local memorychip packager Powertech Technology Inc (力成科技).
The Investment Commission said it would review Tsinghua’s involvement with Powertech, SPIL and ChipMOS as one case.
“The combined global market shares of the three [Taiwanese] companies are significant. It is very unlikely that the commission would approve all three, as it will severely hurt Taiwan’s semiconductor industry,” commission Executive Secretary Emile Chang (張銘斌) told a press conference.
Citing Industrial Development Bureau statistics, Chang said the three companies’ combined share of the global market was 17.4 percent, almost the same as the world’s largest chip packager and tester ASE’s share of 18.6 percent last year.
Chang said given that the three firms’ planned investments are to be reviewed as one case, the commission would take more than two months to deliberate them.
In addition, Chang said Chinese investments in Taiwan’s chip packaging and testing industry would be taken into account when the Ministry of Economic Affairs evaluates the possibility of removing a ban on Chinese investment in local IC design houses.
Market researcher TrendForce Corp (集邦科技) said acquiring a stake in the three Taiwanese firms would be key steps for Tsinghua to achieve its ultimate goal of expanding China’s presence in the global semiconductor industry.
“By integrating memorychip designing and manufacturing, China would have its own chip products and factories, and would have greater appeal for global companies to look to China,” TrendForce said in a note.
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