Unimicron Technology Corporation ("UNIMICRON") (TAIEX: 3037) and Phoenix Precision Technology Corporation ("PPt") (TAIEX: 2446) jointly announce that each of their boards has passed the resolution of the merger between UNIMICRON and PPt today. The swap ratio for PPt to UNIMICRON would be 1 to 0.6.  If the merger is approved by shareholders meetings of UNIMICRON and PPt respectively, UNIMICRON, the surviving entity, will merge PPt, the dissolved entity, upon the closing of such merger.  The English and Chinese names of the surviving entity will be Unimicron Technology Corporation and欣興電子股份有限公司, respectively, and its paid-in capital will be around NT$15.28 billion.

As one of the world top manufacturers of printed circuit boards (“PCB”), UNIMICRON consolidated operating revenue and net income after tax in 2008 are NT$45.7 billion and NT$2.43 billion, respectively.  PPt is the world’s major professional manufacturer of substrates and its operating revenue and net income after tax in 2008 are NT$13 billion and NT$31 million, respectively.  The aggregated operating revenue of UNIMICRON and PPt in 2008 is NT$58.7 billion, approximately, US$1.7 billion, hence, it is believed that this merger will extensively enhance the ability to serve customers and strengthen the market leading position.

UNIMICRON product portfolios include HDI, multi-layer PCB, Flexible Printed Circuit, Rigid-Flex PCB and substrates, which are used widely in the fields of cell phone, communication, consumer electronics products, etc.  PPt focuses on R&D and manufacturing of substrates, which are primarily for use in computer, communication and consumer electronics products. 

The merger is expected to achieve the following synergies:

1.      Consolidating full-scale product portfolios and diversified customers so as to enhance stable growth of business

The merger will effectively consolidate the dominant products and customers of the two companies.  After the merger, the product portfolios will include the high level PCB and all kinds of IC substrates for the wide use in three major categories—information, communication and consumer electronics. Hence, the merged entity may offer customers one-stop shopping solution and diversify its business so that the business performance may be more stable and steady in the future.

2.      Consolidating the capacity and integrating production and marketing plan so as to enhance ability to serve customers and international competitiveness

Currently, the manufacture facilities of the two companies are located in several places in Taiwan and the PRC, including, Taoyuan, Hsinchu, Shenzhen, Suzhou and Kunshan.  After the merger, the merged entity will consolidate the capacity, integrate the production and marketing plan, expand the capacity and divide the manufacturing of different products in Taiwan and the PRC.  With such strong and extensive capacity basis, it is expected to enhance the ability to serve customers and international competitiveness.

3.      Expanding the economy of scale to reduce operating costs and enhance operating performance

After the merger, it is expected that such consolidation will increase the purchased amount of raw material so as to strengthen the relationship with the suppliers and reduce the manufacturing costs.  In addition, it is planned to improve the utilization efficiency of personnel and assets through the integration of resources so as to enhance the operating performance and cost down the operating expenses.

4.      Consolidating teams, results and plans of R&D to speed up time for new product development and increase competitiveness

UNIMICRON and PPt have invested in R&D extensively. By consolidating the teams, results and plans of R&D for high level IC substrates in the future, it is expected to speed up the time for the development of new high level IC substrates and to increase the growth and competitiveness of the company.

ABOUT UNIMICRON

UNIMICRON was incorporated on January 25, 1990.  The current paid-in capital of UNIMICRON is NT$10.93 billion.  As a comprehensive and professional PCB manufacturer, UNIMICRON principal products include HDI, multi-layer PCB and substrates.

ABOUT PPt