KUALA LUMPUR (July 26): Dagang Nexchange Bhd (DNeX) today announced that it has completed the acquisition of 60% equity interest in SilTerra Malaysia Sdn Bhd (SilTerra) from Khazanah Nasional Bhd. 

In a statement today, the group said following completion of the acquisition, DNeX is now the majority shareholder of SilTerra.

“We are pleased to announce the completion of our acquisition of SilTerra. Our entry into the semiconductor market is certainly well-timed, given the current global shortage of chips affecting deliveries of cars, home appliances, notebooks, smartphones and video game consoles, amongst others. 

“We expect demand to continue to rise beyond 2024, driven by growing adoption of 5G wireless technology, IR 4.0, Internet of Things (“IoT”), cloud computing and electric vehicles,” according to DNeX Group Managing Director Tan Sri Syed Zainal Abidin Syed Mohamed Tahir. 

Together with its partner, Beijing Integrated Circuit Advanced Manufacturing and High-End Equipment Equity Investment Fund Center (Limited Partnership) (CGP Fund), the group is confident in its ability to transform SilTerra into a competitive global semiconductor technology player that will be able to capitalise on strong demand for semiconductor chips globally, Syed Zainal added.

Moving forward, the group will focus on strengthening SilTerra’s fundamentals in terms of plant utilisation and cost optimisation, while introducing a vast network of global clientele. 

“With our focus on the adoption of the latest semiconductor manufacturing technology, we expect to set in motion a positive spill-over effect throughout the semiconductor value chain in Malaysia, comprising companies involved in product design, manufacturing, packaging and assembly. 

“We are confident that this will in turn strengthen Malaysia’s position in the ever-evolving digital arena,” he highlighted.

To recap, DNeX’s acquisition of the 60% stake in SilTerra is valued at RM168.3 million and will be satisfied entirely by cash. CGP Fund owns the remaining 40% stake in the nation’s largest chipmaker.

DNeX and CGP Fund plan to pursue various initiatives that will upgrade SilTerra’s equipment and manufacturing capabilities in new technologies, increase the utilisation of SilTerra’s foundry, while at the same time, optimise better product mix, as well as improve sales margin, which in turn is expected to drive SilTerra's turnover and enhance its earnings potential.

Shares in DNeX closed four sen or 5.19% lower at 73 sen today, valuing the company at RM2.11 billion. Year-to-date, the stock has increased by 231.82%, from 22 sen in January.