Global IC sector enters consolidation era, says Mediatek Chairman Tsai
Taiwan-based integrated circuit designer MediaTek Inc. ( ) Chairman Tsai Ming-kai ( ) said Friday that the global semiconductor industry has entered an era of consolidation since the business has reached maturity.
On the sidelines of MediaTek’s annual general meeting, Tsai suggested that large IC firms in Taiwan should gear up to seek opportunities for acquisitions to expand and secure needed technology, while smaller suppliers could be brought under the corporate umbrella of larger rivals in the future.
Tsai made the comments after a recent series of prominent merger and acquisition deals in the global semiconductor sector. Among the deals, U.S. IC giant Intel Corp. announced last week that it has agreed to acquire Altera, a programmable logic semiconductor supplier, for US$16.7 billion.
The MediaTek executive said that through business buy-ins, IC firms could be able to set a goal for longterm development to take on esca- lating competition in the market. He said that even for a firm to be acquired, a buyout deal could be good for its future development.
The government, Tsai said, should encourage local IC manufacturers to acquire foreign counterparts and provide necessary assistance to facilitate the acquisitions, which would help the local semiconductor business recruit foreign talent and raise its competitive edge.
Tsai said that Taiwan’s high tech sector should not fear competition from China, which has laid down a plan to cultivate its own supply chain in the high-tech sector, including the semiconductor industry, in a bid to reduce dependence on foreign suppliers.
He said there is room for Taiwan’s IC firms and their Chinese counterparts to cooperate for a larger share of the world market, but he added that the local industry should improve itself to take on more competition.
For MediaTek, Tsai said, the company is determined to make more efforts to develop advanced technology and roll out more high-end products.
In Friday’s meeting, MediaTek shareholders approved the company’s proposal to issue NT$22 (US$0.71) in cash dividends per share for 2014, when the IC designer posted NT$30.04 in earnings per share, compared with NT$20.51 recorded a year earlier.
The cash dividend payout will be the highest level in five years for MediaTek, as it benefited from strong global demand for smartphone chips and a merger with MStar Semiconductor Inc. ( ).