Micron may Acquire Qimonda

Reports are surfacing that Micron, the largest U.S. maker of memory chips, may buy German competitor Qimonda AG. Digitimes writes:

One of the key drivers for the deal is the fact Micron will be able to leverage Qimonda's Inotera joint venture, which would add additional Taiwan facilities and IP revenue opportunities for Micron, in addition to its existing MeiYa joint venture with Nanya Technologies. Qimonda's fab assets are also more valuable to Micron, compared with other potential buyers, such as Hynix or Nanya, as their common geographies allow logistics synergy, Freedman noted.

Since Qimonda cannot fund projected losses through fiscal year 2009, Freedman expects that a deal could be done for US$350 million, near US$1 per share, or 25% of the US$4 per share book value. Freedman estimates an additional cost of about US$100 million would be required to convert Qimonda fabs to Micron processes.

Still, such a deal would would significantly reduce DRAM capacity investments in fiscal year 2009 for Micron, according to the note. Freedman calculated a US$500 million fiscal year 2009 capex for Micron's organic DRAM capacity.

Freedman concluded that the acquisition of Qimonda would position Micron as one of the two surviving memory leaders (along with Samsung) able to control supply and IP as the industry waits for long-term demand drivers to materialize, namely SSDs.

Well as we have noted before, the memory industry is in a very long-enduring slump. They haven't recovered from the excess capacity they generated when Windows Vista was launched and continue to struggle to leverage higher prices. Consolidation in the industry is therefore expected.

Digitimes: Micron-Qimonda deal likely to happen, says analyst

Hon Hai Denies Interest in Pegatron

Reports out of Taiwan suggest Hon Hai is interested in purchasing ASUSTek spin-off Pegatron. Digitimes wrote:

Foxconn Electronics (Hon Hai Precision Industry) is reportedly considering acquiring the operations of Pegatron Technology through a stock exchange, according to a Chinese-language Economic Daily News (EDN) report.

Asustek acknowledged that releasing Pegatron stock is one of the strategies adopted after the spin-off of its OEM arm, while Foxconn declined to comment regarding the speculation, according to the paper.

Several first-tier OEMs have been in negotiations with Asustek seeking to cooperate or acquire Pegatron since last year. Some market watchers believe Foxconn and Pegatron would be an excellent complement for each other, added the paper.

However, currently Hon Hai, the Foxconn parent company have denied the rumors.

Digitimes: Foxconn considering Pegatron acquisition, says paper

NY Times: Taiwanese electronics giants deny reported tie-up

Adlink Acquires Ampro

In their quest to become one of the largest industrial PC manufacturers in Taiwan, Adlink acquired Ampro, a high-end industrial PC manufacturer with 25-years experience. Ampro products are applied in typical IPC applications such as communications, aviation and military. Digitimes reports:

The addition of Ampro enables Adlink to offer Extreme Rugged, rugged and industrial products and services for use in aircraft, trains, ships and other environments that subject equipment to extended temperature, shock and vibration.

Digitimes reports that this acquisition makes Adlink the third largest IPC manufacturer in Taiwan and the China Economic News (CENS) reports:

ADLINK Technology Inc., after fully acquiring U.S.`s Ampro, is also expected to see its April revenue hit a single-month high.

Article 1: Adlink Technology completes acquisition of Ampro Computers
Article 2: Taiwan`s Industrial Computer Makers Post Solid Sales Performance in Q2