When Companies Acquire Companies

There are lots of reasons why companies buy other companies. Purchasing a competitor, for instance, then folding that company is one way to control a market. Purchasing a company with expertise in an area that your firm would like to expand into is another method for investing in R&D without starting from scratch. Simple investment for healthy returns, much like purchasing stock, is yet another reason for the process.

On July 21, 2004, publicly traded Amkor Technology Inc. of Chandler, Ariz., reported that it signed an agreement to acquire privately held, Morrisville, N.C.-based Unitive Inc. and to obtain a majority interest of approximately 60% in Taiwan-based Unitive Semiconductor Taiwan Corp., a joint venture between Unitive and various Taiwanese investors.

It didn't come as a big surprise. Just 2 years ago, Advanced Packaging reported that Amkor and Unitive had formed a 2-year manufacturing alliance for the Asian supply chain Under the agreement, Unitive became Amkor's primary source of wafer-level packaging solutions in Taiwan, providing wafer-level design, repassivation, redistribution and bumping services. Amkor provided a broad range of packaging and test services including probe, wafer thinning, substrate design and procurement, assembly, and final project management and support services.

Bruce Freyman, Amkor's president, says, “Unitive is a premier electroplated and wafer bumping, wafer-scale packaging company, and our acquisition of them gives us a significant advantage in the marketplace in next-generation flip chip packaging.” The synergy between Amkor, a contract semiconductor assembly and test services (SATS) provider, and wafer-level packaging from Unitive has grown from an existing long-term partnership.

It was a smart move. Flip chip unit growth is expected to triple between 2003 and 2007, according to TechSearch International. This is much larger than predicted growth for the semiconductor industry overall. As the industry increases its adoption of flip chip and wafer-level packaging, the ability to provide subcontract services in integrated wafer bumping, wafer-level processing and chip packaging should be a way for Amkor to differentiate itself from other SATS providers.

At SEMICON West this year, Unitive made lots of announcements. First, they developed and qualified an electroplated lead-free bumping technology using a SnAg approach, thus meeting global requirements to remove lead from electronics. Unitive also announced a die-level processing capability that integrates services such as design, wafer bumping, multiplayer redistribution, backgrinding, dicing, tape-and-reel, backside laminate, backside metallization and laser marking. The company's latest process of applying a new spun-on polymer coating permits further reductions in the size of ICs.

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From any angle, Amkor's decision to acquire Unitive is an insightful reach into the future.

Gail Flower


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