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Economic Daily News: Promote mergers and acquisitions

Economic Daily News: Promote mergers and acquisitions

In the face of competition from China's "red supply chain," Taiwan's electronics industry has resorted to mergers and acquisitions as a strategy to increase complementarity and enhance competitiveness. Taiwan-based MediaTek Inc., one of the world's largest IC designers, announced a plan early this week to acquire Richtek Technology Corp., one of the world's leading analog IC companies. By joining MediaTek, Richtek will be able to optimize power management performance. Through the acquisition, MediaTek will be able to speed up its presence in the Internet of Things market. The planned acquisition has obtained the support of investors, as evidenced by the fact that MediaTek's shares have soared for two days in a row. Strengthening competitiveness through acquisitions has long been one of MediaTek's strategies. In 2012, MediaTek first acquired Mstar Semiconductor Inc. and later Ralink Technology Corp. This year, Mstar acquired Alpha Imaging Technology Corp., while a subsidiary of Mstar merged with Ili Technology Corp. At the same time, MediaTek acquired Chingis Technology Corp. The slowdown of China's smartphone market and competition from Chinese companies are what prompted MediaTek to take those steps. With the Chinese market reaching saturation, MediaTek has lowered its shipment target for mobile phone chips by 11 percent for this year. Besides MediaTek, Advanced Semiconductor Engineering Inc. recently bought a 25 percent stake in Siliconware Precision Industries Co., while in the financial sector, Yuanta Financial Holdings has decided to acquire Ta Chong Bank. The government, which did not play a role in this wave of mergers and acquisitions, should adopt a policy to make the mergers and acquisitions more competitive. We suggest that the government cooperate with the private sector and set up an acquisition fund in the form of a public-private partnership. Mergers and acquisitions are needed not only in industry but also in the financial sector. We suggest that the government work toward this direction after next year's elections. (Editorial abstract -- Sept. 10, 2015) (By Y.F. Low)


Updated : 2021-09-24 21:02 GMT+08:00