Chip testing and packaging service provider King Yuan Electronics Co (京元電子) yesterday said it plans to divest its Chinese subsidiary amid heightened geopolitical tensions and a US-China trade dispute that led to a drastic shuffle of the global semiconductor supply chain landscape.
Intensifying competition in the Chinese chip market and changes in the ecosystem also prompted King Yuan to decide to exit China, the company said in a statement.
That decision is part of the company’s long-term growth strategies and financial resource allocations, it said.
Photo: Peng Chien-li, Taipei Times
King Yuan said it would shift its investment to Taiwan to catch up with fast-growing demand for chips used in mobile devices, vehicles, Internet of Things, high-performance computing (HPC) and artificial intelligence (AI) devices.
The company’s board of directors has approved increasing its capital expenditure this year to NT$12.28 billion (US$377 million), a rise of about 75 percent from an earlier NT$7 billion budget, to satisfy demand for AI and HPC devices. King Yuan is considered a major chip testing service provider to Nvidia Corp’s AI chips.
King Yuan said it plans to sell its 92.16 percent holding of King Long Technology (Suzhou) Ltd (京隆科技) in a 4.885 billion yuan (US$674 million) deal to a number of companies including King Legacy Investments Ltd, Dense Forest Ltd and other Chinese firms.
The deal would bring a NT$16.6 billion capital influx to Taiwan, the firm said.
King Yuan said it plans to use the capital to fund domestic factory and equipment expansion, and to invest in advanced testing equipment and research-and-development efforts.
The Hsinchu-based company said it expects to register a NT$3.83 billion asset gain from the share sale.
The company plans to allocate NT$3.67 billion from the gain to distribute an extra cash dividend of NT$1.5 per share next year and in 2026.
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