- ASMPT is a critical link in the global semiconductor value chain
- The company noted that the lead frame business is extremely competitive and requires economies of scale
ASM Pacific Technology Limited (ASMPT) has announced that it reached an agreement to form a strategic joint venture (SJV) involving its materials segment with key partners.
“We have been closely monitoring the market trends of the lead frame business for some years and have observed industry consolidation among its market participants. Our Materials segment is consistently among the top lead frame manufacturers globally. It continues to be a strong business, in tandem with the growth of the global semiconductor market. However, the lead frame business is extremely competitive and requires economies of scale in order to be sustainably successful. This Strategic Joint Venture enables our Materials segment to prepare its business for the future, benefitting its employees, its customers and the Group,” noted Robin Ng, CEO, ASMPT.
The lead frame market
The SJV is expected to begin operating by the end of the year. In the meantime, ASMPT’s materials segment will continue its business, with the management team, operations, expansion plans and product development unchanged.
The SJV will operate as an independent business under the auspices of the SJV partners, tapping the deep and complementary network and market experience of Wise Road and Asia IO to help extend and solidify its leadership position in the lead frame market. ASMPT will hold a minority equity interest in the SJV amounting to 44.44 per cent, while Wise Road and Asia-IO will collectively hold a controlling interest of 55.56 per cent through their designated investment vehicles. The financials of the SJV will be equity accounted by the Group once the SJV begins operating.
“The excellent track record, financial strength, and collective attributes of the partners in this Strategic Joint Venture form a very strong and capable foundation to fully actualize the immense potential inherent in the lead frame business. This will benefit all the stakeholders in ASMPT’s Materials segment, and give our customers the assurance that their needs and future requirements are well looked after,” concluded Ng.
“FITA is very pleased to form a strategic partnership with ASMPT and supports its Strategic Joint Venture with Wise Road Capital and Asia-IO. Wise Road Capital is one of the key investment platforms in FITA. Through our strong alliance member network of more than 100 leading high-tech players in China and the world, we are confident that FITA can provide a strong synergistic support to this Strategic Joint Venture and propel the growth of the business,” said Brighten Li, Chairman of the Financial and Information Technology Alliance (FITA).
“ASMPT is a world class leader in the semiconductor value chain and we have full confidence in the technology, quality and operations leadership of ASMPT’s Materials Segment. Wise Road Capital’s senior management team brings a good combination of finance expertise and industry expertise to support the success of the Strategic Joint Venture. We believe that the additional financial resources and industry network the new shareholders will bring in, plus a sharp focus on growing the Materials business together with ASMPT, will bring the success of the Strategic Joint Venture to the next level,” said Fai Yeung, managing partner of Wise Road Capital.
“This Strategic Joint Venture corroborates our strategy to back a high-quality player that is investing to become an even stronger player in the industry with a larger market share when the market upcycle resumes,” said Denis Tse, managing partner of Asia-IO.