February 11, 2004 – In what could be the start of a major round of consolidation in the crowded semiconductor assembly and test services (SATS) arena, Singapore-based ST Assembly Test Services Ltd. (STATS) and ChipPAC Inc., Fremont, CA, have announced a $1.6 billion stock-swap merger agreement.
The deal creates the second-largest IC test house in the world, and a backend assembly subcontractor with more than $1 billion in revenues this year. STATS shareholders will hold 54% of the new company, which will be called STATS ChipPac Ltd. and headquartered in Singapore. Managers believe the merger will result in $25-$30 million in annual savings after it is completed in 2Q04.
The merger will create the third largest SATS supplier in the industry, behind Taiwan’s ASE Inc. and US-based Amkor Technology Inc. Analysts say STATS ChipPAC will leapfrog ahead of no. 3 Siliconware Precision Industries Co. in Taiwan, which has annual revenues of about $650 million. — J. Robert Lineback, Senior Technical Editor