Toshiba and Amkor sign MoU for acquisition of Toshiba’s Malaysian semiconductor assembly and test operations

TOKYO, JAPAN & CHANDLER, USA: Toshiba Corp. and Amkor Technology Inc. have signed a non-binding memorandum of understanding for the acquisition by Amkor of Toshiba Electronics Malaysia Sdn. Bhd. (TEM), Toshiba’s semiconductor assembly operation in Malaysia, together with a license to Amkor for certain related intellectual property rights.

Subject to the satisfactory conclusion of due diligence, negotiation and signing of definitive agreements and receipt of any necessary government approvals, Toshiba and Amkor expect to complete the transaction by early January 2012.

Established in 1973, TEM has steadily expanded the scale of its assembly operations, primarily of discrete and analog semiconductors. In recent years, its main product has been power semiconductors.

Toshiba positions power semiconductors as a driver of growth for its semiconductor business and seeks to maximize cost competitiveness across its front- and back-end operations. Transferring ownership of TEM to the Amkor group will allow TEM to take full advantage of Amkor’s large scale production and material procurement capabilities and boost the overall efficiency of its power semiconductor operations.

Toshiba will continue to subcontract power semiconductor assembly and test to TEM as an important source of key products. As it does so, Toshiba will shift its focus and resources to front-end wafer fabrication for power semiconductors by reinforcing production capabilities at Kaga Toshiba Electronics Corporation, Toshiba Group’s discrete semiconductor production base in Japan’s Ishikawa Prefecture.

Amkor expects the transaction to further strengthen its relationship with Toshiba and to grow its semiconductor assembly and testing business. In particular, Amkor believes that TEM will provide an excellent platform for increasing its presence in the power discrete market, where Amkor estimates there is unmet customer demand for outsourced assembly and test services.