Taipei-Taiwan-based Nuvoton Technology Corp. has agreed to acquire semiconductor assets from Japanese tech giant Panasonic Corp. for US$250 million in cash to expand its product portfolio.
Nuvoton, a microcontroller unit (MCU) supplier, signed an agreement with Panasonic on Thursday to acquire Panasonic Semiconductor Solutions Co. (PSCS), and the transaction is expected to be completed by the end of June 2020, said Nuvoton spokesperson Jessica Huang (???).
The transaction still requires approval from anti-trust authorities in markets around the globe, which will take into account whether the acquisition will violate fair trade practices, Nuvoton said.
At a news conference held Thursday, Huang said Nuvoton, a subsidiary of Taiwanese memory chip maker Winbond Electronics Corp., and PSCS have complementary product mixes.
While PSCS rolls out MCUs, it also supplies other integrated circuit products such as image sensors and metal-oxide-semiconductor field-effect transistors (MOSFET), items that should broaden Nuvoton's product portfolio.
Huang said Nuvoton hopes to expand its global sales through PSCS's network, in particular to Japanese clients, and intends to take advantage of PSCS's patents and talent pool of more than 2,000 people to boost its research and development capabilities.
According to a report from the Nihon Keizai Shinbun (Nikkei), Japan was once a global semiconductor powerhouse, with Panasonic's semiconductor operations ranking among the top 10 producers in the 1990s.
As competition from semiconductor manufacturers in Taiwan and South Korea escalated, however, Panasonic's semiconductor business has been losing its luster in the global market, the report said.
Nikkei cited a report by U.S.-based market information advisory firm IC Insights as saying that Japan accounted for about 49 percent of the total sales of the global semiconductor market in 1990, but only 7 percent in 2018.
Panasonic had hoped to turn its semiconductor business profitable in the fiscal year to March 2020.
But trade friction between the United States and China has affected global demand and made the goal hard to achieve, so the Japanese tech giant decided to dump PSCS, the Nikkei report said.
According to the report, PSCS posted a loss of 23.5 billion Japanese yen (US$215.59 million) in the year to March 2019 on sales of 92.2 billion yen.
Through the financial strength of its parent company, Nuvoton raised NT$3.6 billion (US$118 million) through a rights issue in September to help make the acquisition.
In addition, Nuvoton is planning to issue global depositary receipts (GDRs) to raise more funds. Nuvoton has scheduled a special general meeting for December to secure approval for the GDR sale plan to finance the deal.
In the first nine months of 2019, Nuvoton had earnings per share of NT$1.87, compared with NT$2.67 in EPS over the same period last year.
Source: Focus Taiwan News Channel