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