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More chipset suppliers to tie up with Taiwan-based IC design houses

More chipset suppliers to tie up with Taiwan-based IC design houses

Cage Chao, Taipei; Steve Shen, DIGITIMES [Friday 20 June 2014]

More chipset suppliers are likely to tie up with Taiwan-based IC design houses in order to tap retail channels as well as to expand their ecosystem in China, according to industry sources.

Microchip Technology announced a deal in late May to acquire all of outstanding shares of Taiwan-based ISSC Technologies, a provider of low power Bluetooth and advanced wireless solutions for the Internet of Things (IoT) market, at NT$143 per share (approximately US$4.74) through a tender offer.

The transaction represents a total equity value of about NT$9.9 billion, and a total enterprise value of about NT$8.9 billion, after excluding ISSC’s cash and investments on its balance sheet of NT$1 billion, said the companies.

Image Sub, a subsidiary of Exar Corporation, also announced recently that it will purchase the stock of Integrated Memory Logic (iML) at NT$91 (US$3.04) per share, or a 34.62% premium, with the merger slated for completion on September 19.

More notably, chipset vendor Intel has made equity investments in a number of Taiwan-based IC design houses, including touch controller supplier Egalax-empia Technology (EETI), flash card controller vendor Skymedi and SoC solution provider Aspeed Technology.

The vertical integration of Taiwan’s semiconductor industry, the easy access to China’s market and supply chains by Taiwan makers and the ability of Taiwan-based companies to engage in international cooperation projects are the main attractions for international chipset vendors to team up with IC design houses in Taiwan, commented the sources.

 

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KB Kee is the Managing Editor of the Moat Report Asia (www.moatreport.com), a research service focused exclusively on highlighting undervalued wide-moat businesses in Asia; subscribers from North America, Europe, the Oceania and Asia include professional value investors with over $20 billion in asset under management in equities, some of the world’s biggest secretive global hedge fund giants, and savvy private individual investors who are lifelong learners in the art of value investing. KB has been rooted in the principles of value investing for over a decade as an analyst in Asian capital markets. He was head of research and fund manager at a Singapore-based value investment firm. As a member of the investment committee, he helped the firm’s Asia-focused equity funds significantly outperform the benchmark index. He was previously the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. KB has trained CEOs, entrepreneurs, CFOs, management executives in business strategy, value investing, macroeconomic and industry trends, and detecting accounting frauds in Singapore, HK and China. KB was a faculty (accounting) at SMU teaching accounting courses. KB is currently the Chief Investment Officer at an ASX-listed investment holdings company since September 2015, helping to manage the listed Asian equities investments in the Hidden Champions Fund. Disclaimer: This article is for discussion purposes only and does not constitute an offer, recommendation or solicitation to buy or sell any investments, securities, futures or options. All articles in the website reflect the personal opinions of the writer.

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