Singapore's Utac, A Beta Manufacturer, Considers Selling And Seeks To Sell For More Than $1 Billion

Following completion of the debt restructuring, Singapore  Semiconductor Packaging and Metering Plant UTAC is meeting with  potential consultants to discuss next steps in recent weeks, including  IPOs (IPOs) and sales are all under consideration.


UTAC  was taken out by private equity funds Affinity Equity Partners and TPG  Capital in 2007 after acquiring it for a total of S$2.2 billion (about  US$1.53 billion at the time). According to sources, UTAC equity holders may seek to withdraw the  company at a price of approximately $1 billion including debt.


According  to the report, most of UTAC's operations were controlled by Global  A&T Electronics, a joint venture between Junhao Investment and TPG.  However, Global A&T Electronics filed for bankruptcy and proposed a  reorganization plan in December 2017. UTAC completed its capital restructuring in January this year.


According to UTAC's official website, the company currently has  production facilities in Singapore, Thailand, Taiwan, China, Indonesia  and Malaysia.


In  February this year, UTAC stated that the amount of losses in 2017 fell  to 81.4 million U.S. dollars, narrower than the 95.1 million U.S.  dollars in 2016. John Nelson, the chief executive of UTAC, revealed in January that he  is in talks with at least five of his peers to purchase and seek to  expand its production base in Southeast Asia.


The  rumors were not surprising to people in the industry. The source  pointed out that UTAC debt is not profitable, and it is not an ideal  target for M&As. Only large companies with sufficient funds may want  M&A, like government funds. Land-based packaging and testing plants, or first-tier companies such  as Riyueguang and Aiker have financial backgrounds. However, Riyue  Guangguang has already sold 150 billion yuan to buy shares in defective  products. In the short term, there should be no large-scale merger and  acquisition plans.


In  recent years, the semiconductor packaging and testing industry has been  in the ascendant. The major snack company Jiangyin Changdian has most  shocked the industry. The second is the launch of Sun Moonlight’s raids  on hostile takeovers. The two parties shake hands and say that the new  company will soon On  April 30th, Li Cheng made a merger and acquisition of Chaofeng. In  addition, other small and medium-sized mergers and acquisitions were  also involved. Eker entered the Japanese J-Device and acquired the  Toshiba Malaysian plant. Li Cheng entered a merger with Chaofeng last  year. Winning the right to operate the two Japanese test and measurement  plants, Yan Xin bought Quan Zhike and Qi Ge into the main Taiwan Star  Branch.


In  recent years, UTAC has actively carried out organizational and  operational adjustments. At the beginning of this year, it shut down its  loss-making Shanghai factory and transferred its production capacity to  the Thai plant. UTAC's  main businesses include consumer electronics, memory, wireless, logic  chips, mixed-signal and radio frequency chip and other packaging and  testing services. At present, UTAC production bases include Taiwan,  Dongguan, Thailand, Singapore, etc., of which there are two factories in  Dongguan, with QFN is mainly packaged, and the three factories in Thailand are the largest QFN packaging bases. In Taiwan, memory testing is the main business focus.


At  the end of 2013, UTAC sold its Chengdu plant to Texas Instruments of  Texas Instruments. In 2014, it acquired Panasonic's three packaging  plants in Indonesia, Malaysia, and Singapore. Through this acquisition,  Panasonic became the largest UTAC packaging and testing company. The customer has added product lines such as automotive and industrial electronics to successfully expand the Japanese market.


In Taiwan, UTAC has an 8-inch wafer-level packaging line and a 12-inch wafer-level packaging line in Singapore.