Taiwan chip assembler tussles with Tsinghua Unigroup over acquiring rival

by DEBBY WU, Nikkei staff writer

TAIPEI, Dec. 15, 2015 – 

Advanced Semiconductor Engineering, the world's No. 1 chip tester and assembler, said on Monday that it is proposing to secure full ownership of Siliconware Precision Industries (SPIL) in an all-cash, $4 billion deal, two days after Beijing-backed tech conglomerate Tsinghua Unigroup announced that it plans to buy a 25% stake in the smaller Taiwanese company.

ASE acquired a 25% stake in SPIL for $1.1 billion, or 45 New Taiwan dollars per share, in an unsolicited tender offer earlier this year. To fend off ASE's hostile takeover bid, SPIL Chairman Bough Lin turned to key Apple assembler Foxconn Technology Group, the trade name of Hon Hai Precision Industry, for a share swap but that plan was voted down by SPIL shareholders due to significant dilution of their equity. Tsinghua Unigroup's proposed investments in SPIL are also seen by many as the Taiwanese chip assembler's latest attempt to repel ASE.

The saga came as China is furiously developing its own chip sector with efforts led by Tsinghua Unigroup to acquire foreign technologies and companies. Further, the Chinese tech supply chain is posing a growing threat to its struggling Taiwanese counterpart by launching an attack on prices.

On Monday, ASE Chief Financial Officer Joseph Tung told reporters that ASE is proposing to the SPIL board to buy the rest of the 75% stake in the smaller rival at NT$55 per share, 21% above SPIL's Monday close of NT$45.55 and the same price offered by Tsinghua Unigroup in the Chinese conglomerate's acquisition plan.

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