100 billion semiconductor giant Wingtech intends to acquire the UK’s largest chip manufacturer NWF

On July 6th, the rumor that Wingtech, a semiconductor giant with a market value of 100 billion yuan, plans to acquire Newport Wafer Fab (NWF), the largest chip manufacturer in the UK, has finally settled.

100 billion semiconductor giant Wingtech intends to acquire the UK’s largest chip manufacturer NWF

(Wingtech Announcement)

According to the announcement by Wingtech Technology, on July 5, 2021, the company’s wholly-owned subsidiary Nexperia (Anshi Semiconductor) and NWF parent company NEPTUNE 6 LIMITED (hereinafter referred to as “NEPTUNE”) and its shareholders signed the relevant acquisition agreement (hereinafter referred to as “NEPTUNE”). Referred to as “this transaction”). After the completion of this transaction, Nexperia will hold 100% equity of NEPTUNE and will hold 100% equity of Newport Wafer Fab (NWF) through NEPTUNE.

At the end of the 2020 fiscal year, the target company has total assets of 44.7076 million pounds and net assets of -5,177,300 pounds. In the 2020 fiscal year, it will realize operating income of 30.91 million pounds and net profit of -186.1 million pounds. The company stated that the operating income, net profit, and total assets of the subject company of the transaction accounted for a small proportion of the relevant financial data of the listed company, and did not have a significant impact on the company’s production and operation.

According to a press release received by OFweek Electronic engineering network, Nexperia’s acquisition of NWF can help the company achieve ambitious growth goals and investments, and further increase global production capacity.

It is reported that Nexperia is a customer of foundry services provided by NWF and became its second largest shareholder by investing in NEPTUNE in 2019. Regarding this transaction, Nexperia Chief Operating Officer Achim Kempe said: “We are very pleased to expand the global manufacturing business to Newport. Nexperia has formulated an ambitious growth plan, and the addition of the Newport plant will help meet the global demand for semiconductors. Market demand. Xingang factory has a skilled operation team that plays a vital role in ensuring the continuity of supply. We look forward to building a bright future together.”

Dr. Paul James, General Manager of NWF, added: “This acquisition is good news for NWF employees and the broader business district of the entire region. Nexperia is investing heavily to increase production capacity to ensure long-term and stable development in the future. We look forward to becoming a member of the Nexperia global team and hope to retain the existing workforce and expand when needed. We are also very happy to continue to contribute to the local semiconductor ecosystem.”

Dr. Drew Nelson, the outgoing NWF chairman, said: “The change in ownership of the Xingang plant marks an important step towards the future of the plant and the region. We are very pleased to maintain the development of high-end silicon devices in the 200 mm fab. Expertise. At the same time, this acquisition also gives us the opportunity to continue to develop new compound semiconductor production technologies and become an important part of the South Wales compound semiconductor cluster.”

Zhang Xuezheng, Chairman of Wingtech Technology, Chairman and CEO of Nexperia Semiconductor, stated that the addition of Nexperia Newport will effectively enhance Nexperia’s IDM capabilities in the automotive-grade IGBT, MOSFET, Analog, and compound semiconductor product areas.

Where are the highlights of the acquisition of a “not profitable” company?

According to the previous article, the target company’s total assets at the end of the 2020 fiscal year are 44.7076 million pounds, and the net assets are -5,177,300 pounds. In the 2020 fiscal year, it will achieve operating income of 30.91 million pounds and net profit of -186.1 million pounds. If calculated at the latest exchange rate, NEPTUNE’s 2020 revenue will be about 277 million yuan, net profit will be about 170 million yuan, and net assets will be about 46.35 million yuan.

From this point of view, NEPTUNE’s financial data is not high-quality, so what are the highlights of this transaction? Why did Wingtech choose to buy a “not profitable” company at this time? According to OFweek’s electronic square network, NWF chip factory originated in 1982. It is one of the few semiconductor manufacturers in the UK and one of the silicon chip manufacturers producing power supplies for the automotive industry.

In view of the current global core shortage problem, 8-inch wafers are in short supply, and the shortage of automotive semiconductors is even more tense. Up to now, many auto companies have announced that they will stop production due to the “shortage of cores”. NWF mainly produces silicon chips for power applications in the automotive industry, which are one of the core components in power supplies. NWF fabs mainly produce 8 Inch wafers are mainly used. From this perspective, it is unavoidable to speculate that Wingtech is also aiming at the automotive semiconductor track. In addition, for Anshi Semiconductor, after acquiring NWF, the monthly production capacity of approximately 35,000 200mm wafers can be obtained, which can be expanded to 44,000 wafers per month within the current scope, which is nearly doubled. From this point of view, even if this “not profitable” company is taken, it is extremely cost-effective for Anshi Semiconductor and Wingtech.

Judging from the recent investment actions of Wingtech Technology, in August last year, China’s first 12-inch automotive-grade power semiconductor automated wafer manufacturing center project invested and constructed by Wingtech Technology was officially signed and settled in Shanghai Lingang, which was interpreted by the outside world as it The semiconductor business is the first step to achieve the strategic goal of 10 billion US dollars; in February this year, Wingtech’s official website disclosed that the 12-inch wafer fab in Lingang, Shanghai has broken ground in January this year and will be put into operation in July 2022. The production capacity is expected to reach 400,000 pieces per year; just in May of this year, Wingtech’s acquisition of Apple-related assets of OFILM has just been completed. Wingtech Technology and Zhuhai Gree Ventures jointly invested in a 7:3 ratio, and finally paid 1.45 billion yuan in cash to Oufeiguang, which will include this “fruit chain” business, and Wingtech is expected to use this to enter Apple’s supply Chain; In June of this year, Wingtech Anshi Semiconductor announced its expansion plan. It plans to invest 700 million US dollars (approximately RMB 4.5 billion) in the next 12-15 months for the expansion of European wafer fabs and Asian packaging Testing center and global R&D base. The company also announced the start of a new 8-inch wafer production line in Manchester, UK.

From this point of view, although NWF is currently not a “profitable” company, it will help Wingtech to enter the semiconductor industry from the mobile phone industry with an industrial layout of “mobile phone ODM + semiconductors” after the acquisition of Nexperia , And to develop customers in the automotive field.

Will it cause the risk of British intervention?

As early as July 2, foreign media reported that Nexperia had acquired NWF at a price of approximately 63 million pounds. Nexperia is a world-renowned semiconductor IDM company headquartered in Nijmegen, the Netherlands. It can deliver more than 90 billion products each year. Its products are widely used in various electronic designs worldwide. NWF is one of the few chip manufacturing companies in the UK. It is located in Newport, South Wales. It mainly produces silicon chips for power applications in the automotive industry. It is worth noting that the source said that Nexperia will announce the acquisition next Monday or Tuesday.

It is understood that Wingtech has acquired Nexperia with 33.8 billion yuan in 2019, and this transaction has also become China’s largest semiconductor acquisition so far. Wingtech’s 2020 annual report shows that during the reporting period, the company completed the acquisition of the remaining shares of Nexperia Semiconductor, and has achieved 100% holding of Nexperia Group.

Regarding the benefits brought about by the acquisition of Nexperia and NWF, industry analysts believe that Wingtech’s goodwill will increase again. According to data, as of December 31, 2020, the original book value of the goodwill items shown in Wingtech’s financial statements was nearly 22.7 billion yuan, of which 130 million yuan was the goodwill formed by the company’s previous acquisition of Wingtech Communications , Nearly 21.4 billion yuan was formed by the acquisition of Anshi Holdings Exchange in the previous period.

According to the latest announcement, the relevant agreements involved in this transaction are still in the process of execution, and the transfer of this transaction has not yet been completed, and there are still uncertainties. Regarding the composition of uncertainty, foreign media have also said that at the time of global chip shortages, countries are striving to increase their independence in semiconductor production, which means that this acquisition agreement may be subject to review or intervention by the British government. .

Foreign media quoted a British government spokesperson as saying, “We know that Nexperia will acquire NWF. Although we think it is inappropriate to intervene at this time, we will continue to monitor the situation closely. If the situation changes, we will Do not hesitate to use our power. We remain committed to the semiconductor industry and its key role in the British economy.”

The Links:   DMF-50260NFU-FW-23 SKB72-16

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