State Government of Sarawak Announces Proposed Merger Between 1st Silicon and X-FAB Semiconductor Foundries AGSarawak, Malaysia, March 22, 2006.
The State Government of Sarawak ("State of Sarawak") and XTRION N.V. today announced the merger of 1st Silicon (Malaysia) Sdn Bhd ("1st Silicon") and X-FAB Semiconductor Foundries AG ("X-FAB"). The combined entity will be named XFAB Silicon Foundries N.V. The signing ceremony of the merger took place in Kuching, Sarawak, 11.30 a.m on 22 March 2006.
1st Silicon is a leading pure play foundry in Malaysia offering logic, mixed signal, non-volatile memories and several emerging innovative niche technologies. The Germany-based X-FAB is one of the world's leading analog mixed signal foundry. The combined manufacturing capacity of the merged company will be approximately 700,000 200mm equivalent wafers per year, and the sales of the new company are expected to exceed $300 million USD in 2006.
There is a strong strategic rationale for these two established foundries to merge as the manufacturing, technological and marketing synergies are significant. Moreover, there is minimal overlap in terms of personnel and geographic coverage. Post-merger, 1st Silicon and X-FAB will have key manufacturing facilities in Sarawak (Malaysia), Erfurt (Germany), Lubbock (Texas, U.S.A) and Plymouth (U.K.). Its marketing network and client base will span across the Americas, Europe and Asia.
In the late 1990s, the State of Sarawak invested into 1st Silicon to strategically transform and foster the economic development of the State. The investment into the wafer fabrication business was a tactical choice to spearhead the State's entry into high-tech and knowledge-intensive industry. As a result of this, spill-over effects in terms of creation of various clusters and supporting industries have provided a nucleus for growth in domestic human talent pool and high-technology process capabilities. Over the years, this has enhanced Sarawak's manufacturing expertise and global connectivity.
"The State of Sarawak views this strategic merger and long-term partnership with X-FAB as a powerful union and will further the State's long-term goal to develop its world-class high -tech and knowledge-based sector" said YAB Pehin Sri Haji Abdul Taib Mahmud, Chief Minister of Sarawak.
"X-FAB's decision to expand their Asian operations from Sarawak is a testimony that Sarawak has successfully transformed and diversified its economic base beyond natural resource and agricultural base industries" added the Chief Minister.
"This strategic partnership signifies X-FAB's long-term commitment and confidence in the State of Sarawak as we believe they have the technological expertise and sustainable pool of well trained local workforce as well as a stable political, social and pro-business environment" commented Mr. Roland Duchâtelet, Chairman of the Supervisory Board of X-FAB.
Mr. Hans-Juergen Straub, CEO of X- FAB stated that he was impressed with the cutting-edge advanced manufacturing facilities and quality of the workforce that 1st Silicon possesses. "We look forward to working together and to developing an efficient technologically advanced and profitable business model in the mid-term," he noted.
Dr. John Nelson, CEO of 1st Silicon added, "The merger will benefit both parties through long-term financial viability as well as expanding our mutual customer bases because of X-FAB's strong presence in Europe and North America and 1st Silicon's strong customer base centered primarily in Japan, Korea and Taiwan. This globalization of sales will present new opportunities for growth for both companies"
The merger is subject to regulatory and other approvals and is expected to be completed by the 3rd quarter of this year.
About 1st Silicon (Malaysia) Sdn. Bhd. (1Si)
1st Silicon (www.1Si.com) is one of the global semiconductor industry's premier foundries dedicated to reliable, cost-effective manufacturing processes for high-volume system-on-chip (SoC) designs and innovative niche markets. 1Si offers manufacturing services for embedded non-volatile and flash memories, high-voltage and mixed-signal technologies, CMOS image sensors and charged-couple devices (CCDs). These technologies are vital in automobiles, multimedia, displays, Internet-enabled applications, smart cards, and other market applications. Founded in 1998, 1st Silicon is headquartered in Kuching, Sarawak, Malaysia and has offices in Japan, Korea, Taiwan and the USA.
X-FAB Semiconductor Foundries AG, headquartered in Erfurt, Germany, is a leading analog/mixed-signal foundry manufacturing silicon wafers for analog-digital integrated circuits (mixed-signal ICs) on customer order. The company maintains wafer production facilities in Erfurt (Germany), Plymouth (UK) and Lubbock, Texas (US), and employs approximately 1,100 people worldwide. Wafers are manufactured based on ultra-modern modular CMOS and BiCMOS processes with technologies ranging from 1.0 down to 0.35 micron. Main application areas are the automotive, communications, consumer and industrial sectors.