ATIC offers to buy firm for $2 billion

08/09/2009 00:00 AST

Abu Dhabis state-owned Advanced Technology Investment Company (ATIC) offered to buy Chartered Semiconductor for $1.8 billion, while major shareholders in Hynix began the sale of a $2.8bn stake, kickstarting consolidation in a chip sector emerging from its worst ever downturn.

Signs of recovery among semiconductor makers that have been hammered by chronic oversupply and weak demand have prompted expectations that stronger players will take out weaker rivals in an effort to boost market share and better control production.

Loss-making Singapore contract chipmaker Chartered Semi, which makes the chips for Microsofts Xbox 360 game console, has struggled against bigger Taiwan competitors, and the deal with ATIC may help it tide over its financial woes.

Bigger foundries, which supply chips for fabless chip designers and chipmakers that own their own plants but are increasingly outsourcing production, could spend more to upgrade technology and win more orders for a new-generation of personal computers, mobile phones and flat-screen TVs.

Japans Toshiba was in talks with Chartered Semi and Global foundries about outsourcing production of some of its next-generation system chips to help cut costs, two company sources said yesterday.

ATIC, fully owned by the Abu Dhabi government, is growing its investments in the semiconductor industry, currently consisting of a facility in Dresden, Germany and a state-of-the-art facility under construction in New York.

ATIC chief executive Ibrahim Ajami said that the firm was eyeing more acquisitions with the aim of becoming a global leader in semiconductor technology.

Earlier this year, ATIC spent $2.1bn on a 55.6 per cent stake in Globalfoundries, a joint venture with Advanced Micro Devices.

Gulf Daily News