Tsinghua Unigroup buys 25% stake in Taiwan's Powertech

According to a release, Unigroup will pay NT$75 ($2.30) per share in a private placement of new Powertech shares.

Powertech was founded in 1997. Its main operations are in Taiwan where it employs more than 11,000 people, or 90% of the total headcount. The company saw revenue increase 8% year-on-year to NT$$40 billion in 2014. Net profit came to NT$3.2 billion, compared to a net loss of NT$4 billion in 2013.

Powertech said in the release that the partnership will reinforce its market share in Taiwan as well as improve exposure in China and global markets. The proceeds from the transaction will be used to expand its capacity of advanced assembly and testing services in Taiwan, develop advanced production processes, and to recruit more staff.

"With its ability in the chip testing and packaging industry, we believe Powertech will be an important player in the semiconductor industry supply chain of Taiwan and China. We expect to achieve a win-win situation following our cooperation," said Weiguo Zhao, Unigroup's chairman.

The deal requires approval from Powertech's shareholders and local regulators. In a separate statement, Taiwan's Ministry of Economic Affairs, said it hasn't received an application for the Powertech investment, adding that it would take Unigroup's global purchases as well as potential impacts on Taiwan's semiconductor industry into consideration while examining the deal.

Last month, state-backed Tsinghua Holdings, Unigroup's holding company, agreed to pay $3.78 billion for a 15% stake in Western Digital, a US-based disk drive manufacturer, which is the largest acquisition by Tsinghua so far this year. In May, it bought a majority stake in Hewlett-Packard's China-based data-networking business for approximately $2.3 billion.

Unigroup has also previously acquired Spreadtrum Communications, a Chinese mobile chip manufacturer and sold a 20% stake in itself to Intel Corp. for $1.5 billion.

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• Topics
• Greater China
• Technology
• Expansion
• China
• Taiwan (China)
• Technology