KUALA LUMPUR (Aug 4): Dagang NeXchange Bhd (DNeX), through its recently acquired business unit SilTerra Malaysia Sdn Bhd, has entered into a long-term multi-year wafer supply and purchase agreement with ChipOne Technology (Beijing) Co Ltd worth over US$400 million (approximately RM1.69 billion).
Under the agreement, SilTerra will supply wafers which are used in the production of semiconductor devices to ChipOne. DNeX said the agreement will allow SilTerra to have a guaranteed wafer base load for the next several years, which will mitigate any downward variability in customer orders and ensure SilTerra has a reasonable factory utilisation rate moving forward.
According to DNeX, ChipOne is the world’s leading driver integrated circuit (IC), touch controller and fingerprint sensor fabless IC design house based in Beijing, China.
"We are pleased for SilTerra to enter into this agreement with one of the leading semiconductor chip design companies in China. This also shows the commitment of the new shareholders of SilTerra in transforming the company through driving sustainable business," DNeX group managing director and SilTerra executive chairman Tan Sri Syed Zainal Abidin Syed Mohamed Tahir said in a statement today.
"IC designers are striving to deliver energy-efficient products, and this is aligned to strategies towards energy conservation and sustainability. As such, they look to adopt the smart power design techniques as well as advanced power technologies to meet this objective," he said, adding that SilTerra will be leveraging on its proven process technology, foundry design kits and intellectual property to deliver optimum energy-efficient products.
On July 26, DNeX announced that it has completed the acquisition of 60% equity interest in SilTerra from Khazanah Nasional Bhd for RM168.3 million cash, making it the majority shareholder of SilTerra.
DNeX's partner Beijing Integrated Circuit Advanced Manufacturing and High-End Equipment Equity Investment Fund Center (Limited Partnership) (CGP Fund) owns the remaining 40% stake in the nation’s largest chipmaker.
At noon market break today, shares of DNeX were up 2.5 sen or 3.47% at 74 sen apiece with a market capitalisation of RM2.2 billion.