Date: 07/09/2009
Cash rich ATIC acquiring Chartered to accelerate growth in semiconductor world
Semiconductor fab business is becoming more of a cash rich investor option rather than a technology-brain's option. Market suggests if you have lots and lots of money go for fabs, but if you have semiconductor technology genes, go for a fables chip business model. Well, that's what today's top semiconductor news suggests. The cash-rich gulf based Advanced Technology Investment Company LLC (ATIC) with it's already established fab called globalfoundries (AMD's spin over invested by ATIC), is stepping (big) further by acquiring world's third largest and one of the advanced semiconductor fab; Chartered Semiconductor based in Singapore. And in another news, Japan based Advanced multi-product (Analog, MCU, flash, SoCs and many such popular ICs) semiconductor chip specialist Toshiba is planning to outsource some of it's IC manufacturing work to globalfoundries and Chartered Semiconductor.
Even not only Toshiba, media report says, ST Microelectronics, another leading chip vendor is also off-loading some of its chip production work to globalfoundries.
The acquisition bid by ATIC is subject to approval. ATIC to buy each Chartered ordinary share at $2.68 per share representing an equity value of approximately S$2.5 billion (US$1.8 billion).
The statement by ATIC says "The transaction will allow ATIC to build on the complementary platforms of Chartered and GLOBALFOUNDRIES, with Chartered's customer relationships and capabilities in both 8-inch and 12-inch fabrication, and GLOBALFOUNDRIES' advanced technology expertise, capacity profile and global footprint."
"We believe that by having access to ATIC's long-term capital and related assets, Chartered has an opportunity to bring its skills, capabilities and leadership to the next level," said Waleed Al Mokarrab, Chairman of ATIC. "By acquiring Chartered, ATIC is expanding its investments in the semiconductor industry which currently consist of a GLOBALFOUNDRIES leading facility in Dresden, Germany and a new, state-of-the-art facility under construction in upstate New York."
Doug Grose, CEO of GLOBALFOUNDRIES is expected to head as CEO of the combined operations, and Chia Song Hwee, CEO of Chartered as COO.
"Chartered's board of directors recognizes the efforts of the management team and employees on the considerable progress they have made," said Jim Norling, chairman of the board of directors at Chartered. "Given the importance of scale and the need for substantial, continued capital investment, and having carefully assessed all strategic options available to Chartered, we believe this transaction provides Chartered shareholders the opportunity to realize their investment. In addition, it enables Chartered to accelerate its goal of becoming a leading player in the semiconductor industry. We have today appointed Deutsche Bank AG, Singapore Branch as an independent financial advisor to advise shareholders on the fairness of the offer, and we will submit the proposal for a shareholder vote."
"Chartered and GLOBALFOUNDRIES will be able to draw on each other's strengths to enable the next generation of semiconductor innovation, utilizing the value of both companies and the intellectual capital of thousands of skilled employees," said Ibrahim Ajami, CEO of ATIC. "Chartered and GLOBALFOUNDRIES are well positioned to meet the growing chip demand to come from billions of new mobile phones, cars, televisions, computers and other devices."
Fab business is now not so much an engineer's favorite; it's an attraction for cash-rich investor. So is the big entry of Arabs in the semiconductor world.