Intel confirms $65M investment in Taiwan’s Powertech

March 2, 2007 – Confirming rumors and expectations, Intel Corp. says it has indeed leading a round of investments in Taiwan chip assembly firm Powertech Inc., one of the chipmaker’s largest investments in Asia to date.

Arvind Sodhani, president of Intel Capital, noted the investment furthers Intel’s plan to strategically invest in areas that will benefit its flash memory business. Powertech, a provider of memory backend services, “was able to meet Intel’s requirements for NAND product lines,” the company said in a statement.

Powertech chairman/CEO DK Tsai noted that, “beyond the funding, our intention is to build an ongoing relationship with world-class industry players,” adding that “we expect to grow our business significantly as the demand for our services grows.”

Powertech was the most profitable chip assembler in Taiwan last year with about US $0.31 in EPS on total revenues of $514 million, and plans for about $303 million in capex this year, and investors are projecting even better performance in 2007, with earnings rising 37% to $0.42 EPS and nearly 50% higher revenues (to $757 million), according to the Taiwan Economic News.

Intel had been speculating acquiring a stake in Powertech. The chipmaker recently invested in fabless house Skymedi, which specializes in control ICs for flash memory control cards. Memory module supplier Kingston Technology, which helped Intel make that deal, is currently Powertech’s largest institutional shareholder, the paper noted.

In 2000, Powerchip Semiconductor sold its backend equipment and about 500 Japan-trained assembly workers to Powertech, pushing the firm into memory chip assembly, the paper noted. Between 2000 and 2004, Powertech added NAND flash packaging and testing capabilities, with Toshiba a main customer.


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