Amkor Completes Semiconductor Packaging Firm Nanium's Buyout
Zacks Investment Research | May 23, 2017 09:18PM ET
Amkor Technology, Inc. (NASDAQ:AMKR) recently completed the acquisition of Europe's largest OSATS (Outsourced Semiconductor Assembly and Test Services) company, Nanium S.A. The terms of the deal have not been disclosed.
In the last one year, shares of Amkor have outperformed the Zacks characterized Electronics Semiconductors industry. The stock has returned 78.9% compared with the industry’s gain of 52.4%.
Benefits of the Deal
Portugal-based Nanium provides semiconductor assembly, packaging, test, engineering and manufacturing services. Its solutions include package designing, wafer-level packaging (WLP), wafer probe, assembly and test, supply-chain management and drop shipping.
As per Amkor, Nanium has created a reliable wafer-level fan-out (WLFO) technology that is high-yielding and has taken production level to high volume. Nanium employs approximately 550 people. It recorded annual sales of $40 million for fiscal ended September 30, 2016.
The deal is a step on Nanium’s part to enhance the use of WLFO technology to expand its market share in the packaging market. By leveraging Nanium’s technology, Amkor will be able to strengthen its foothold in the fast-growing market of wafer-level packaging for smartphones, tablets and other applications. Management believes that the deal could expand Nanium’s scale of manufacturing, thereby increasing the company’s customer base.
Steve Kelley, Amkor president and CEO, said, “This strategic acquisition will enhance Amkor’s position as one of the leading providers of WLP and WLFO packaging solutions.
Our Take
Amkor Technology is one of the largest providers of semiconductor packaging and test services. It packages and tests integrated circuits (ICs) for chip manufacturers, fabless semiconductor companies and contract foundries.
The company has been supplementing organizational growth with strategic acquisitions. In the past, its acquisitions were always small and well-managed, and integration issues were negligible. In Feb 2016, Amkor fully acquired J-Devices Corp., the largest outsourced semiconductor assembly and test provider in Japan. The deal is intended to strengthen Amkor’s position in Japan. It complements Amkor’s own sales efforts and will help in offering better services to its customers
We believe acquisitions will continue to remain a part of Amkor’s growth strategy to supplement the top line.
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