TAIPEI: Advanced Semiconductor Engineering Inc (ASE) yesterday said it would stick to its plan to acquire between 5 percent and 25 percent of rival Siliconware Precision Industries Co (SPIL), as industry consolidation is crucial to fend off competition from China.
“The industry needs consolidation, given the limited room left for Taiwan to grow after China enters the market,” ASE chief operating officer Tien Wu said on the sidelines of an annual semiconductor trade show.
Wu made the comments after SPIL unveiled a strategic alliance with Hon Hai Precision Industry Co on Friday last week via a share swap, while rejecting a NT$35 billion (US$1.07 billion) tender offer by ASE.
“It is very clear that ASE wants a friendly deal. This is purely an equity investment,” Wu said. “We are making the first step toward consolidation and Hon Hai’s [proposal] will not obstruct our plan.”
In the face of China’s ambition to expand its presence in the global semiconductor industry, Taiwanese firms need to work together to improve their capabilities, while innovating and differentiating their services from those of their rivals, Wu said.
“Taiwan cannot count on cost reduction and hard work any more. We have to differentiate,” Wu said, adding that system-in-a-package is one of those services with high differentiation, but developing such technology needs talent, intellectual property rights and heavy capital investment.
A combined company would be able to secure global talent and collect the intellectual property rights required to develop innovative products, Wu said.
