487 million yuan, ASE acquired two packaging and testing plants from Infineon!
On the afternoon of February 22, ASE Investment Control, a major semiconductor packaging and testing manufacturer, and Infineon, a major chip manufacturer, jointly announced that the two parties have signed a definitive agreement, and ASE Investment Control will spend 62.589 million euros (about 487 million yuan) to acquire Infineon's two back-end packaging and testing plants in Cavite, Philippines and Cheonan, South Korea.
According to the announcement, ASE will acquire 100% of the common shares of Cypress Manufacturing, Ltd., a subsidiary of Infineon, through its subsidiary ASE Corporation, so as to complete the operation of Infineon's back-end packaging and testing plant in Jiameidi City, Philippines - Infineon Technologies Manufacturing Co., Ltd. (Infineon Technologies Manufacturing). Ltd) in the Philippines with a transaction value of approximately EUR 38.998 million (approximately NT$1.32 billion), and ASE will also acquire Infineon Technologies Power Semitech Co., Ltd., the operating entity of Infineon's back-end packaging and testing plant in Cheonan, South Korea, through its subsidiary, ASE Korea Co., Ltd., for a transaction value of approximately 2. 3.591 million euros (about NT$798 million).
Upon completion of the transaction, ASE will operate with employees from the existing two back-end packaging and testing plants, and further develop the two plants to support multiple customers. At the same time, ASE and Infineon have entered into a long-term supply agreement, under which Infineon will continue to receive previously established services as well as new product offerings to support its customers and meet existing commitments.
Infineon said its manufacturing strategy, which includes balanced operations of in-house and external manufacturing, is an important pillar of the company's path to profitable growth. By merging the production volumes of Cavite and Cheonan under the new owner, ASE and providing the highest quality manufacturing services for the entire industry, Infineon and ASE will be able to leverage the synergistic potential of each other, resulting in attractive growth potential for both companies.
Alexander Gerski, Vice President and Head of Back End at Infineon, said: "We have a proven track record of having excellent, highly competent teams and the highest quality standards at both our Cavite and Cheonan locations. "ASE has been a trusted strategic partner of Infineon for many years and will be an excellent new owner to continue on this path of success and further strengthen the two packaging and testing plants. Our sale of the plant to ASE is in line with Infineon's manufacturing strategy, providing mutual synergies and enabling further growth while strengthening supply chain resilience."
Dr. Tien Wu, Chief Operating Officer of ASE said, "The automotive and power management segments are both strategic focus areas for Gooday Mart. The acquisition of Infineon's facilities in Cavite and Cheonan marks ASE as part of its strong commitment to a long-term strategic partnership with Infineon to jointly develop back-end manufacturing solutions that match future growth opportunities. Given Infineon's market leadership in automotive and power semiconductors, and ASE in back-end semiconductor manufacturing, this collaboration creates a win-win solution for the entire ecosystem, from the product company to the end consumer. ”
It is understood that Infineon's Cheonan packaging and testing plant in South Korea is located about 60 miles south of Seoul, focusing on power chip module packaging and testing applications, including home, industrial automation and automotive fields, with about 300 employees. Infineon's Cavite packaging and testing plant in the Philippines has more than 900 employees, mainly in the production line of lead frame packaging, targeting automotive, industrial control and general applications.
The parties expect the transaction to close by the end of the second quarter of 2024, at which time all pending closing conditions will be satisfied.
It is worth mentioning that in recent years, ASE Investment Holdings has continued to expand semiconductor packaging and testing capacity outside Chinese mainland.
In December 2021, ASE officially announced the sale of four of its factories and businesses in mainland China to Wise Road Capital for US$1.46 billion (about 9.3 billion yuan).
In November 2022, ASE broke ground for the fourth and fifth factories of the new plant in Penang, Malaysia, and it is expected to be completed in 2025. ASE pointed out at the time that it would invest US$300 million over five years to expand its production plant in Malaysia, purchase advanced equipment, and train more engineering talents. At present, the Penang Plant 4 has opened at the end of January this year, focusing on copper chip bridging and image sensor packaging, and also plans to expand the advanced packaging industry. Annual sales in Penang are expected to reach US$350 million, which is expected to double to US$750 million in the next two to three years.
According to the financial report, ASE Group's capital expenditure this year is likely to increase by more than 40%-50% over last year, reaching $2.1-2.25 billion, a record high, of which 65% is used for packaging business, especially advanced packaging projects.
The acquisition of Infineon's two semiconductor packaging and testing plants is expected to further increase ASE Group's share of the global OSTA market and consolidate ASE Group's leading position.
Editor: Xinzhixun-Rogue Sword