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4-Traders Homepage  >  Equities  >  TAIWAN STOCK EXCHANGE  >  United Microelectronics Corp.    2303   TW0002303005

UNITED MICROELECTRONICS CORP. (2303)
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United Microelectronics : UMC Board Approves 100% Acquisition of MIFS Fab from Fujitsu as Part of Global Manufacturing Strategy

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07/12/2018 | 07:01pm CEST

By a News Reporter-Staff News Editor at Electronics Newsweekly -- United Microelectronics Corporation (NYSE: UMC; TWSE: 2303) ("UMC"), a leading global semiconductor foundry, announced that its Board of Directors has approved for the company to fully acquire Mie Fujitsu Semiconductor Limited (MIFS), a 12-inch wafer foundry based in Mie, Japan, from Fujitsu Semiconductor Limited (Fujitsu Semiconductor). Based on the net value of MIFS on March 31, 2018, the purchase value will be no more than ¥ JPN 57.63 billion. UMC currently owns 15.9% of MIFS shares. Under the terms of the agreement, Fujitsu Semiconductor will transfer the remaining 84.1% of its shares in MIFS to UMC, making MIFS a wholly-owned subsidiary.

UMC's Board of Directors also approved plans for the company to apply with the China Securities Regulatory Commission for UMC's mainland operations to be listed on the Shanghai Stock Exchange as an A-list offering. HeJian Technology (Suzhou) Co. will represent UMC's China businesses, which include HeJian's 8" fab, United Semi and its 12" fab in Xiamen and Shandong-based UDS, which provides IC design support services.

Jason Wang, co-president of UMC said, "UMC is experiencing high demand from mature 12" processes. With new applications in 5G, IoT, automotive and AI requiring these technologies, we anticipate the market conditions driving this demand to remain strong. With existing 300mm fabs in Taiwan, China and Singapore, Japan-based MIFS will help customers further diversify their manufacturing risk with a robust production base to ensure business continuity while enhancing UMC's worldwide service quality. We are excited that the strong partnership between UMC and Fujitsu Semiconductor will enable us to achieve further growth and provide customers with higher value through the acquisition of MIFS."

Co-president Wang continued, "An A-share listing on the Shanghai Stock Exchange for our HeJian-led China subsidiaries provides an ideal path for UMC to quickly capitalize on the rapid growth of China's semiconductor market and facilitate long-term development. The raised capital would be allocated towards reinvestment in UMC's successful China operations in order to provide customers with a complete, integrated IC manufacturing solution from chip design to manufacturing, which will help expand our market share and further increase production scale, technical quality, and overall competitiveness."

Listing of A-shares to provide a more diversified source of local funds improves the company's financial structure and strengthens the company's asset and capital positions, while allowing more capital to remain in Taiwan. As part of the listing, UMC can also attract and retain top local talent through implementation of an Employee Stock Ownership Program (ESOP).

The revenue of HeJian constitutes about 11% of UMC's consolidated revenue, while the number of new shares planned for issue will also be around 11% of the total shares outstanding. UMC will remain the majority shareholder possessing approximately 87% of HeJian's equity, with no meaningful dilution to the rights and interests of the parent company.

Keywords for this news article include: Asia, China, Business, Technology Companies, United Microelectronics Corporation, Semiconductor Integrated Circuits Companies.

Our reports deliver fact-based news of research and discoveries from around the world. Copyright 2018, NewsRx LLC

(c) 2018 NewsRx LLC, source Technology Newsletters

Stocks mentioned in the article
ChangeLast1st jan.
FUJITSU LTD -1.24% 741 End-of-day quote.-9.17%
UNITED MICROELECTRONICS CORP. --End-of-day quote.
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Financials (TWD)
Sales 2018 156 B
EBIT 2018 6 497 M
Net income 2018 9 358 M
Debt 2018 3 640 M
Yield 2018 3,79%
P/E ratio 2018 21,92
P/E ratio 2019 18,36
EV / Sales 2018 1,45x
EV / Sales 2019 1,24x
Capitalization 223 B
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus HOLD
Number of Analysts 23
Average target price 15,5  TWD
Spread / Average Target -13%
EPS Revisions
Managers
NameTitle
Shan Chieh Chien Co-President & Director
Jason Wang Co-President
Chi Tung Liu Head-Finance & Head-Accounting
Chiung Lang Liu Non-Executive Director
Chen Feng Huang Independent Director
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