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Subsidiary Company Acquires UK wafer Fab Wingtech Technology Chip Capacity Accelerates to Expand


Wingtech Technology is ramping up semiconductor manufacturing.

On the evening of July 5, Wingtech Technology announced that its wholly-owned subsidiary, Nexperia, has signed the relevant acquisition agreement with Neptune 6 Limited and its shareholders. Upon completion of the Transaction, the Company will have an indirect 100% interest in Newport Wafer Fab (Newport Semiconductor Manufacturing Plant).

Wingtech's announcement did not disclose the amount of the deal, which was previously reported to be about 63 million pounds.

Through this acquisition, Nexperia gained 100% ownership of Newport Wafer Fab, a chip manufacturing plant located in Newport, South Wales, UK, which was officially renamed Nexperia Newport.

Nexperia is a client of Newport Wafer Fab's Wafer foundational services and became its second largest shareholder in 2019 through an investment in Neptune 6 Limited. In addition to the Newport plant, two other European manufacturing plants in Manchester and Hamburg have recently received significant investment.

It can be seen that after the acquisition of Nexperia, Wingtech Technology is continuing to expand its global capacity, which is particularly critical in the context of global semiconductor shortage. At the same time, the company said that the acquisition will increase the company's ability to provide products that meet the automotive-qualified standards and expand its market share.

On July 6, Wingtech Technology closed at 99.4 yuan, down 1.54%.


Under the background of global shortage, manufacturers are also constantly strengthening the chip manufacturing capacity. IC photo

Who is Newport Wafer Fab?

Media reports show that Newport Wafer Fab is the largest chip manufacturer in the UK. However, compared with leading chip manufacturers such as TSMC and UMC, the volume of Newport Wafer Fab is not large and it is currently in a loss state.

The announcement shows that Newport Wafer Fab's total assets at the end of the fiscal year 2020 are 44,770,600 pounds, net assets are -5,177,300 pounds, and the operating income in the fiscal year 2020 is 30,911,000 pounds, and the loss is 18,611,000 pounds. However, Wingtech said that the above data accounted for a small proportion of the relevant financial data of listed companies, and there is no significant impact on the company's production and operation.

Prior to that, Wingtech Technology acquired the European semiconductor giant Nexperia at 26.8 billion CNY, which became the largest semiconductor merger in that year. It should have accumulated a lot of experience in transnational operation and management.

The Newport semiconductor manufacturing facility, which was first established in 1982, currently has a monthly capacity of more than 35,000 200mm wafers, an 8-inch wafer plant, covering a wide range of semiconductor technologies, from MOSFET and Trench Gate (Trench)IGBT using wafer thinning methods to CMOS, analog and compound semiconductors. Most of the products are automotive-regulated.

This is in line with the business of Nexperia, a leading manufacturer of discrete and power IC IDM, one of the world's leading automotive semiconductor companies, and one of the customers of Newport Wafer Fab. In 2020, Nexperia group's income from the automotive, mobile and wearables, industrial and electric power, computing and consumptions accounted for 45%, 23%, 22%, 5%, 5%, among them, the income from Nexperia takes almost half of its total income, which will be further strengthened by the joining of the new factory.

"Newport will effectively enhance our IDM capabilities in automotive IGBT, MOSFET, Analog and compound semiconductors," said Wing Zhang, Chairman and CEO of Wingtech Technology and Chairman and CEO of Nexperia.

In addition to the automobile industry, the demand of the compound semiconductor is growing, Wingtech's report shows that in the next few years, with the help of the boom in the global 5G infrastructure and 5G mobile phone, PC and cloud server, electric cars, China's new infrastructure, global chip prices, the global power semiconductor industry will be growing at a high speed. For 5G devices, demand for the use of compound semiconductors such as SiC and GaN in electric vehicles and industrial facilities, including solar facilities, is increasing dramatically. Growth in the next generation of compound power semiconductors, including SiC(4H-SiC) and GaN, has now begun. Market research firm Yole predicts that the SiC power semiconductor market will grow at a 29 percent CAGR to reach $2 billion by 2024.

Urgent Capacity Expansion

In response to the growing demand, Wingtech Technology is also expanding its semiconductor capacity and scale. Since last year, the shortage of semiconductors has become more serious, especially for automotive semiconductors, and is continuing this year. Therefore, wafer fab, IDM plants, chip design plants are strengthening their chip manufacturing capacity. Fabless manufacturers expand production through mergers and acquisitions and building factories. Fabless manufacturers also try to invest in fabs and assemblying and testing plants to ensure the supply of production capacity and fight for the right to speak in the industry chain.

In this wave of core shortage, the shortage of 8-inch plants is particularly serious, and the 8-inch plants are of low efficiency, which can also be seen from the loss of Newport Wafer Fab. In recent years, most fabs have expanded their production by 12 inches, but since last year, under the condition of serious shortage of mature capacity, 8-inch plants and related equipment are scarce. Direct acquisition of existing 8-inch plants has also become an option for leading companies.

Aside from Nexperia, World Advanced also accquired an 8-inch plant. On April 28, panel maker AU said it would sell the L3B facility to Advanced World for NT $905 million (about 210 million CNY). The facility was an 8-inch wafer facility that AU acquired from Semiconductor Corp., and that Advanced World was able to reuse.

In addition, the expansion of Nexperia has continued. On June 24, it launched its new 8-inch wafer production facility in Manchester, with the first phase scheduled for completion in the third quarter of 2021. At the beginning of this year, the Wingtech Technology 12-inch automotive-regulated semiconductor wafer manufacturing center project s in Shanghai.

According to the financial report, the assembly and test plant of Nexperia is also undergoing transformation and upgrading. Among them, the Dongguan factory is being expanded, adding the 4th floor plant, and adopting new automated production line and SiP (system-level packaging) and other new technologies. It is also investing to expand production capacity in the Philippines (LFPAK) and Malaysia (clip bonding).

Wingtech Technology also said that it will continue to increase its investment in Nexperia to help it expand the scale of research and development, wafer and assembly&test, so as to further strengthen its competitiveness. According to Cimo Research, among the top 20 companies in the global power discrete device industry in 2020, there are 5 Chinese companies, and the 9th one is Nexperia.

In 2020, Wingtech Technology achieved an operating income of 51.7 billion, a year-on-year growth of 24%; Net profit attributable to shareholders was 2.42 billion yuan, up 93% year on year. By product, revenue from mobile phones and accessories remained the core sectors, accounting for 81 percent, and revenue from semiconductor business accounted for 18.75 percent. However, the semiconductor business grew rapidly, realizing revenue of 9,891,6118 million CNY, up 521.96% compared with the previous year.

For Wingtech Technology, in addition to the ODM business of mobile phones, the second growth curve of semiconductor is also essential. Wingtech's move coincide with the trend of semiconductor industry to accelerate the construction of production capacity when the supply of production capacity falls due to short of demand. From the global industrial environment, all regions are competing for manufacturing capacity, merger and investment will continue.

Source: 21st Century Business