IQE acquires full ownership of CSDC joint venture

Epiwafer foundry and substrate maker IQE plc of Cardiff, Wales, UK has announced the acquisition of third-party shareholdings in its CSDC joint venture in Singapore, giving it is 100% ownership.

Established in March 2015, CSDC was a joint venture between IQE’s Singaporean subsidiary MBE Technology Pte Limited (51%), WIN Semiconductors Corp (25%), Nanyang Technological University (18%) and individuals of the NanYang University (6%). It was formed to develop and commercialise compound semiconductor technologies for academic and industrial customers based on Molecular Beam Epitaxy (MBE) technologies in Asia.

According to IQE, the geopolitical landscape in Asia has changed significantly this year, with the localisation of Asian technology supply chains rapidly becoming evident and the development of opportunities for the China 5G market.

“In the current geopolitical context, Singapore represents a strategically significant site for IQE,” says IQE’s CEO Dr Drew Nelson. “The capabilities of the CSDC team and skills availability in that location, coupled with proximity to Asian chip customers and OEMs, provide a strong opportunity to contribute to IQE’s global growth opportunities,” he adds. “With 100% control, IQE will be best positioned to address the current financial position and secure the strategic direction of the operation.”

Revenue recognised by IQE and its Singaporean subsidiary will be unaffected by the transaction, says the firm. It is anticipated that post acquisition adjusted EBITDA and adjusted Operating Profit in the consolidated group accounts for fiscal year 2019 will be adversely affected by about £0.5m.

IQE says that the acquisition is for a nominal fee of US$1 to WIN Semiconductors Corp and SGD$1 to each of the other third party shareholders, to be settled in cash. The non-cash balance sheet impacts will be finalised as part of the completion of acquisition accounting for the shareholdings. For the year ended 31 December 2018, CSDC recorded net losses of SGD$8.9m. The net liabilities attributable to CSDC as at 31 December 2018 were SGD$15.4m. The acquisition constitutes a related party transaction under AIM Rule 13 by virtue of WIN Semiconductors Corp and Nanyang Technological University being substantial shareholders in CSDC hence they are related parties under the AIM Rules.

IQE’s CEO Dr Drew Nelson will remain as a director of CSDC and LG Yeap, general manager for MBE Technology Pte Ltd, will become a director of CSDC.

Tags: IQE MBE MBE Technology Pte Limited WIN Semiconductors IQE

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