UMC buys into auto-electronics biz by acquiring Becom Electronic

Feb 21, 2005 Ι Industry In-Focus Ι Auto Parts and Accessories Ι By Ken LPM, CENS
facebook twitter google+ Pin It plurk

Taipei, Feb. 21, 2005 (CENS)--Silicon-foundry giant United Microelectronics Corp. (UMC) has acquired as much ownership as 50% in Becom Electronic Inc. as part of its plan to venture into the lucrative automobile-electronic business, which is estimated at US$130 billion worldwide in 2007.

UMC vice chairman John Hsuan will be likely assigned to hold Becom chairmanship next month after a Becom shareholder conference. UMC acquired the dominant stake in the auto-electronic company through a recent issuance of additional NT$300 million (US$9.3 million at US$1:NT$32) shares launched by the company.

In addition to UMC, Action Electronics Co., Ltd., Parawin Venture Capital Corp. and First Commercial Bank subscribed Becom shares in the latest share issuance. Becom is UMC's another foothold in auto-electronics business after UMC bought US$12 million of Action's overseas convertible bonds last year.

Founded in 1993, Becom has shifted production emphasis to auto audio and video systems from notebook computers and palm-sized computing devices. The company began turning profitable last year.

Taiwan's industry watchers pointed out that Becom would move to make itself compliant with world leading carmakers and tap orders from Ford, Mazda, GM (China), Kia and Hyundai after UMC steers it. They said it would not be an easy job for electronics manufacturers to cross into the automobile industry since barrier for the entry is quite high with the industry's long and complicate product verifications.

UMC is not the only Taiwanese electronics manufacturer to diversify into automobile industry. Hon Hai Precision Industry, Taiwan's largest manufacturing conglomerate by production revenue, has acquired 100% of Antec Electric System Co., Ltd., which is good at electric products for cars such as wire harnesses, battery cables, and high-tension cords.
©1995-2006 Copyright China Economic News Service All Rights Reserved.