TCL, world’s third largest television maker, eyes stake in chip equipment firm ASM Pacific

PUBLISHED : Monday, 08 October, 2018, 5:11pm
UPDATED : Monday, 08 October, 2018, 5:11pm

TCL Corp said it has made preliminary contact with ASM International, responding to a Bloomberg News report that the Chinese electronics giant was considering acquiring the Dutch chip gear maker’s US$1 billion stake in a Hong Kong-listed affiliate.

TCL, the world’s third-largest television maker, is said to be working with an adviser to explore a possible bid for the Dutch company’s 25 per cent holding in ASM Pacific Technology.

On Monday, the Chinese firm said in a stock exchange filing it explores cooperation opportunities with a lot of semiconductor companies but has not signed a deal.

TCL, which also makes and sells BlackBerry smartphones as well as other home electronics, is looking to diversify into semiconductors, an area the Chinese government has designated a top investment priority.

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The company, based in southern China’s Guangdong province, is seeking to transform itself into a technology powerhouse by building and buying makers of key components, such as touch screens and chips.

At the same time, activist investors Elliott Management Corp and Eminence Capital are said to have pushed Nasdaq-traded ASM International to sell its ASM Pacific shares. The Dutch company’s machines are used to turn silicon wafers into chips, while ASM Pacific produces chip assembly and packaging machinery.

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Shares in ASM Pacific were little changed in Hong Kong. TCL’s stock fell 1.8 per cent in Shenzhen.

“We’ve begun exploring opportunities with ASM Pacific and other domestic companies to understand the industry’s prospects,” TCL said in its filing. “As of this announcement, we’ve had preliminary contact with ASM International but neither party has signed agreements or contracts.”