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(Alliance News) - Semiconductor firm IQE PLC on Thursday said it has bought out its partners in a loss-making Singapore joint-venture to take a sole ownership of CSDC Private Ltd.
For a nominal sum, IQE acquired Taiwanese firm WIN Semiconductors Corp's 25% holding and the 24% stake held by Singapore's Nanyang Technological University and those associated with it.
The CSDC joint-venture, in which IQE's Singapore subsidiary MBE Technology Pte Ltd had a 51% stake, was created in March 2015.
IQE said: "It was established as a vehicle for the development and commercialisation of compound semiconductor technologies for academic and industrial customers based on molecular beam epitaxy technologies in Asia."
By taking sole-ownership, the London-listed firm said it is now able to restructure the operation, which is currently loss-making, and pursue Asian market sales opportunities.
Chief Executive Drew Nelson said: "In the current geopolitical context, Singapore represents a strategically significant site for IQE. The capabilities of the CSDC team and skills availability in that location, coupled with proximity to Asian chip customers and equipment manufacturers, provide a strong opportunity to contribute to IQE's global growth."
In 2018, CDSC made a net loss of SGD8.9 million, roughly USD6.4 million.
IQE added: "Revenue recognised by IQE and its Singaporean subsidiary will be unaffected by the transaction. It is anticipated that post-acquisition adjusted earnings before interest, taxation depreciation and amortisation and adjusted operating profit in the consolidated group accounts for 2019 will be adversely affected by GBP500,000."
Shares in IQE were 2.3% higher at 62.55 pence each in London on Thursday afternoon.
By Eric Cunha; ericcunha@alliancenews.com
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