The Week In Review: Manufacturing

China’s IC ambitions; who is buying STATS?; GF-IBM deal update; chip rankings.

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China’s ambitious plan in the 1990s to create numerous foundries did not come to fruition. But in 2014, the Chinese government described new semiconductor industry programs that will utilize investments by both the Chinese national government ($19.5 billion) and local government and private equity investors ($97.4 billion). “IC Insights believes that these outlays have the potential to significantly change the future IC supplier landscape,” according to IC Insights. For example, “there were nine Chinese companies among the top-50 fabless companies in 2014 as compared to only one company in 2009.”

China’s Jiangsu Changjiang Electronics Technology (JCET) recently made a bid to acquire STATS ChipPAC for $780 million. Here’s perhaps the most complex transaction in recent memory. Semiconductor Manufacturing International Corp. (SMIC) is part of a Chinese-backed investment group that will acquire STATS ChipPAC. Under the plan, SilTech Shanghai, a subsidiary of SMIC, and JCET and the IC Fund have formed an investment consortium in connection with JCET’s proposed acquisition of STATS ChipPAC, an IC-assembly company. Under the plan, JCET will operate and have a majority ownership in STATS ChipPAC, according to a spokesman for SMIC. “JCET will control the bidding company for STATS. That company is called BIDCO. BIDCO is wholly owned by Holdco B. Holdco B is 1.92% owned by IC Fund and 98.08% owned by Holdco A. Holdco A is 19.6% owned by SMIC, 29.4% by IC Fund and 50.9% by JCET. Essentially, JCET controls about 50% (of STATS), SMIC 19% and IC Fund 30%. However, a $140M loan from the IC Fund to Holdco B, has the option to convert to shares,” according to the spokesman.

The Competition Commission of India ( CCI) has cleared the proposed deal between IBM’s chip unit and GlobalFoundries in India, according to the Economic Times.

GlobalFoundries hopes to expand its business in China, according to a report from the South Morning China Post.

Silicon Space Technology (SST), a supplier of rad-hard chips, has partnered with GlobalFoundries to build commercial-ready products for extreme environments and applications.

Kulicke and Soffa Industries has entered into a definitive agreement to acquireAssembléon for $98 million. Assembléon offers assembly equipment, processes and services.

Amtech announced that its subsidiary, Tempress Group Holding, has acquired a majority ownership interest in SoLayTec. SoLayTec provides atomic layer deposition (ALD) systems used in high efficiency solar cells.

Worldwide semiconductor revenue totaled $339.8 billion in 2014, a 7.9% increase from 2013 revenue of $315 billion, according to preliminary results by Gartner. Gartner also released the top chip rankings in terms of sales for 2014.