Fairchild, Himax purchase Taiwanese chip makers
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Fairchild Semiconductor and Himax TechnologiesÂ both completed steps this week that finalize, or nearly finish, their bids to buy Taiwanese chip makers.
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(InfoWorld) - The investment arm of chip maker Intel said Thursday it agreed to invest $65 million in Powertech Technology, a Taiwanese chip assembler that specializes in flash memory and DRAM (dynamic RAM). Intel Capital said the funds, along with capital from other investors Powertech expects to bring on board, will be used as working capital to support the continued growth of its operations. Intel is an active customer of Powertech, it said in a statement, and led the round of financing for Powertech. The announcement came as no surprise in Taiwan, where Chinese-language media had been reporting such a deal between Intel and Powertech was in the works. The investment is one indication of how competitive the NAND flash memory chip business has become, and the importance of Powertech's services. Intel entered the NAND flash memory fray byÂ partnering with Micron Technology, a deal the two companies announced in late 2005, and started early last year under the name IM Flash Technologies. They entered an already competitive industry that included South Korean heavyweights Samsung ElectronicsÂ and Hynix Semiconductor, as well as NAND flash developer SanDisk. NAND flash chips have become popular thanks to widespread use for song storage in digital music players, including Apple's iPod Shuffle and iPod nano. One bottleneck in NAND flash production is in chip assembly, where companies seal the chips inside protective coverings, the final step in the making of a chip. Powertech specializes in memory chip assembly, including NAND flash memory as well as DDR2 (double data rate, second generation) DRAM chips. The NAND business has hit a few speed bumps recently. The popularity of the chips caused companies to build too many new NAND production lines, causing a glut of chips on the market and sending prices tumbling. SanDisk announced a few weeks ago that it planned to lay off 10 percent of its work force in a bid to remain profitable despite steep price cuts on its chips. The Milpitas, California company said NAND flash memory chip prices have dropped 50 percent in the last two months.
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Storage hardware vendor Iomega has signed a deal to buy sister hardware vendors indirectly owned by the Chinese government in an effort to expand the company&#39;s product line.
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(InfoWorld) - Taiwanese chip assembler Advanced Semiconductor EngineeringÂ (ASE) plans to invest $60 million in a low-end chip assembly company based in China. ASE's board of directors approved a plan to invest in Global Advanced Packaging Technology, a Shanghai company, ASE said Thursday. ASE will need approval from Taiwanese regulators to move forward on the investment due to strict regulations meant to keep Taiwanese technology from ending up in missiles and other military hardware aimed at the island by rival China. Taiwan and China remain enemies after splitting in 1949 amid civil war. Despite the strained relationship andÂ tough investment rules, China remains by far the favored destination for Taiwanese investment due to their shared language and culture, and China's lower costs and huge potential market. Currently, ASE has no chip assembly investments in China, despite the fact that earlier this year Taipei gave a green light to chip makers to invest in low-end chip assembly. Although the government announced it would allow such investments, not a single application has been approved by Taipei, and companies remain unsure of how to apply to regulators. Analysts say that the approval process remains very much subject to politics in Taiwan, due mainly to the rivalry with China. In related news, ASE said it will form a special committee to evaluate aÂ possible $5.5 billion dealÂ to be bought out by a consortium led by The Carlyle Group. So far, ASE has only received an indication of interest from Carlyle, not a formal offer. The deal could transform ASE into a U.S. company, where Carlyle is based, thereby allowing ASE to invest in China without asking Taipei for permission. China's growing electronics industry requires chips, and chip assembly factories nearby can help ensure quick placement inside gadgets. Carlyle's interest in ASE is also a sign of the times. There have been a string of private equity deals in the chip industry recently. A few months ago, Carlyle was part of a team that sealed a deal to buy Freescale SemiconductorÂ for $17.6 billion, while Koninklijke Philips ElectronicsÂ sold a majority in its chip unit to another group for around $10.6 billion. Â ADVERTISEMENTNEW IT SERVICES FROM IBM: EASIER TO BUY AND IMPLEMENTDiscover a simpler, more cost-effective way to get the solutions your company needs to grow more flexible and efficient.
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The chip company makes a major deal to reach a new market.
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Taiwanese PC maker purchases struggling American firm in an effort to increase its U.S. market share.
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(InfoWorld) - Four Taiwanese chip assembly companies have won finalÂ approval to invest in ChinaÂ amid a global shake-up that could see a new king crowned in the industry. The companies, which package and test chips before they are sold, can now move ahead with US$99.6 million in planned investments to China. The decision by Taiwan to allow the investments came more quickly than expected, amid rumors that a group of private equity firms may be building a global titan to compete with Taiwan's star chip assembler, Advanced Semiconductor EngineeringÂ (ASE). ASE was among the companies approved for the investments, and allowing it to build more factories in China will help it to stave off potential new rivals by giving it access to China's lower-cost labor market. The investments will also help the Taiwanese companies take part in China's growing chip industry. Taiwan granted permission for the investments to ASE, the world's largest assembly company, and three smaller rivals: Siliconware Precision Industries Co., Greatek Electronics, and Walton Advanced Engineering. Taiwanese companies are required to gain approval for high-tech investments in China because Taipei fears the technology may boost the military threat against the island. Taiwanese chip assemblers have been at odds with regulators for years over the slow pace of China investment approvals. Taipei appeared to give ground in the middle of last year, saying it would start allowing such investments, then continued dragging its feet on most applications. RecentÂ consolidation in the sectorÂ may have finally prompted regulators to act. Earlier this week, one of Taiwan's biggest financial newspapers, the Economic Daily News, reported that a deal by two private equity firms to buy Singapore's United Test and Assembly CenterÂ (UTAC) could result in a merger with the world's second largest chip assembly company, Amkor Technology, which could threaten ASE's dominance. Affinity Equity PartnersÂ and Texas Pacific Group Capital agreed to buy UTAC for around S$2.2 billion (US$1.43 billion). The Singapore offices of both investment firms declined to comment Thursday on the Amkor rumors, though the talk appears to have moved Amkor's stock price. Its shares have climbed 5.2 percent so far this week to end at US$15.44 Wednesday on the Nasdaq Stock Market, compared to a 0.6 percent rise in the Nasdaq Composite Index over the same time. Analysts say the chip assembly sector has become more attractive to investors due to steadier profits. In other deals this year, Singapore's Temasek HoldingsÂ made a S$2.4 billion (US$1.56 billion) bid for Stats ChipPac. The Carlyle Group, another private equity firm, in AprilÂ scrapped a US$5.5 billion deal to buy ASEÂ after the two companies failed to agree on a higher offering price. ASE displaced U.S-based Amkor as the world's largest chip packaging and testing company at the end of 2003, highlighting the exodus of chip production to lower-cost Asian countries. But since then Amkor has been making investments in China, while ASE has been largely held back by Taiwanese regulators. Analysts view China as an important location for chip investment because of its lower costs and growing clout in the industry.Â Intel announced a planÂ in March to spend US$2.5 billion on a plant in China to take advantage of lower production costs there. Taiwan's chip makers say the heavy regulations they face at home have put them at a disadvantage in China. Labor makes up a significant portion of the costs in chip assembly -- around 20 percent, compared to around 5 percent for actual chip fabrication. Fabricators etch transistors and other components on chips, while assemblers package the chips inside protective coating. Taipei's approval on Thursday gives ASE the green light to invest US$21.6 million for a 60 percent stake in a venture with NXP Semiconductors in Suzhou, China. Regulators also approved investments of US$30 million by Siliconware and US$18 million by Walton in the same place. Greatek received permission to invest US$30 million in Jiangsu, China. "We are happy to see the news. We have been waiting for this," said Janet Chen, a spokesperson at Siliconware. Taiwan and China remain enemies after splitting in 1949 amid civil war, the reason Taipei remains wary of allowing certain high tech investments to the mainland. Despite their strained relationship, China remains the favored destination for Taiwanese investment due to their shared language and culture, as well as China's lower costs and incentives for building factories. As part of their China applications, the four Taiwanese companies all included plans to continue investing at home. In all, they pledged to invest NT$75 billion (US$2.29 billion) in Taiwan over the next three years, including NT$40 billion from ASE, NT$20 billion from Siliconware, NT$10 billion from Greatek and NT$5 billion from Walton. Â
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Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC), of Hsinchu, Taiwan, has expanded its patent-infringement fight against rival contract chip maker Semiconductor Manufacturing International Corp.
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Taiwan&#39;s largest memory maker, Powerchip Semiconductor Corp., said it is ready to seek approval from the Taiwanese government to build an 8-inch wafer fab in China.
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Intel will invest $65 million in Taiwanese chip assembler that specializes in flash memory and DRAM.
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The chairman of the world's largest contract electronics manufacturer, which assembles gadgets from AppleÂ iPods to Nintendo's Wii game console, pledged NT$15 billion (US$454.4 million) to Taiwan's most prestigious university to build a new cancer ward and fund research against the disease.
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For China, it could reinvigorate a chip industry that has slowed over the past few years as major chip makers posted a string of money-losing quarters. It also represents a token of goodwill by Taiwan to political enemy China.
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Corporate reshuffling at two Taiwanese electronics companies met with investor praise in Taipei.
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Standard Chartered, the Britain-based emerging markets bank, said it has agreed to buy Taiwan's Hsinchu International Bank for 1.2 billion US dollars (947 million euros).
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Taiwan Semiconductor Manufacturing Co., the world&#39;s biggest producer of made-to-order chips, on Tuesday reported record net profits in the third quarter amid increased demand for chips for cameras, mobile phones, notebook computers and other devices.
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By George Hsu  Taiwan stocks, laggards in Asia since 2001, may catch up with markets elsewhere in the region next year as new products spur demand for video game consoles, computers and semiconductors.
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(InfoWorld) - Taiwan Semiconductor Manufacturing Co. Ltd., the world's largest contract chip maker, reported its worst monthly revenue in 20 months on Friday, but analysts applauded the figure as further proof that an industry glut is dissipating. TSMC said its revenue in February hit NT$20.58 billion (US$624.2 million), down 14.3 percent compared to last year and its worst monthly revenue figure since it reported revenue of NT$20.11 billion in June, 2005. Despite the poor showing, analysts said it was a strong figure considering February is a shorter work month, at only 28 days, and that a major holiday, the Lunar New Year, celebrated throughout Taiwan and much of Asia, also slowed work at TSMC factories. Last year, the Lunar New Year, which is usually a week-long holiday in Taiwan, was on Jan. 29. This year, the first day of the Year of the Pig fell on Feb. 18. "I think the February sales figure was fantastic. It was only down about 2 percent from January," said Warren Lau, chip industry analyst at Macquarie Securities Ltd. in Hong Kong. He said TSMC's February revenue was further proof that a chip glut that has hampered the industry for the past several months is nearing an end. But the return to health over the next few months could be specific to TSMC, and not include the wider chip industry. Earlier this week, Advanced Micro Devices Inc. (AMD) said it will miss its revenue goal for the first quarter of 2007, while rival Intel Corp. outlined plans to beat a microprocessor glut and weak corporate demand for PCs by stepping up chip development speeds. The two companies engaged in a price war last year, and continue to suffer as they duke it out in the market, analysts say. Gartner Inc. believes the chip industry won't start to recover from the glut until the second half of this year. Rising inventories in late 2006 caused companies to slow production and ease off on buying new machinery as a drop in orders idled more and more production lines, said David Christensen, a Gartner analyst, in a recent report. "Look for this trend to continue through the first half of 2007, followed by a slow recovery in the second half of the year," he wrote. Last month, the market researcher revised down its revenue growth estimate for the chip industry this year to 6.4 percent, from a previous forecast of 9.2 percent. Gartner estimates chip industry revenue will reach US$259.7 billion this year. Â