10 August 2020
Sino-American Silicon Products partners with AWSC in private placement
Gallium arsenide (GaAs) IC foundry Advanced Wireless Semiconductor Company (AWSC) of Tainan Science-based Industrial Park, Taiwan has approved a private placement raising a total of NTD$3496.5m through the issuance of 45,000,000 common shares at a price of NTD$77.7 per share.
In a board meeting on the same day, Sino-American Silicon Products Inc (SAS) of Hsinchu, Taiwan passed a resolution to participate in the cash capital increase. SAS will subsequently own a 22.53% stake in AWSC, becoming its largest shareholder.
In recent years AWSC has been developing a gallium nitride (GaN) manufacturing process and considers that the quality and stable supply of the upstream wafers are the key factors, leading to the private placement and involvement of SAS as the subscriber. SAS’ Hsinchu-based subsidiary GlobalWafers Co Ltd (GWC) is ranked as Taiwan’s largest and the world’s third-largest silicon wafer manufacturer. In July, GWC jointly established a compound semiconductor research center with Taiwan’s National Chiao Tung University to expedite the development of the third-generation compound semiconductor material through academic-industrial collaboration.
By forming a vertical strategic alliance, AWSC and SAS expect to collaborate on developing GaN products to supply the key components of 5G, electric vehicles (EVs) and other high-frequency and high-power products and to construct a competitive compound semiconductor industry chain in Taiwan, as well as expanding operational scale and improving operational performance.
AWSC’s client base is diversified, covering the world’s main design houses and integrated device manufacturers (IDMs) in the radio-frequency (RF) components industry. To capture the business opportunities in 5G, WiFi and 3D sensing vertical-cavity surface-emitting laser (VCSEL) chips, AWSC has constructed a second plant and will purchase and install equipment. It is estimated that total production capacity will reach 15,000 wafers per month by the end of 2020, while the new plant is scalable and can be expanded to an additional capacity of 20,000 wafers per month, according to market demand. With the introduction of a strategic investor to the private placement, AWSC expects the proceeds of NTD$3496.5m to fund future capital expenditure.
SAS says that there are two main reasons for it to subscribe to all of the shares in AWSC’s NTD$3496.5m private placement. First, AWSC’s expertise in GaAs foundry and focus on developing new products with novel manufacturing processes, as well as recently expanding its client base of IC design houses, has translated into growing sales and profits. Second, AWSC has been exploring GaN, while GWC has been developing gallium nitride on silicon carbide (GaN on SiC), demonstrating synergy by complementing upstream and downstream materials.