Seiko Epson to buy out IBM’s stake in chip
TOKYO,
June 06 – Japan’s Seiko Epson Corp. said on Friday that it would spend
about 9.45 billion yen ($81.42 million) to buy out International
Business Machines Corp’s 50 percent stake in their electronic
chip-making joint venture.Seiko Epson and IBM established the venture,
Yasu Semiconductor Corporation, in June 2001. It is located in Shiga
Prefecture, western Japan, and is mainly involved in the production of
liquid crystal display (LCD) driver chips.Seiko Epson is in a
restructuring phase, having fallen on hard times amid tough price
competition in the printer, semiconductor and LCD markets. The company
is a major supplier of chips and small LCD panels for mobile
phones.Under the original terms of the aggreement IBM had an option to
sell its stake to Seiko Epson from June 2006. The deal is expected to
be completed on July 1.A Seiko Epson spokesman said the company had
decided to exercise its right to buy IBM’s stake because it could boost
efficiency by making it a wholly owned unit.Yasu Semiconductor had
sales of about 10 billion yen and net income of 167 million yen in the
business year ended March 31. That is a small fraction of Seiko Epson’s
overall revenues of 1.55 trillion yen.Seiko Epson, best known as the
world’s second largest maker of inkjet printers, said it did not expect
the transaction to have a major impact on its financial outlook.The
Nagano-based company posted a group net loss of 17.92 billion yen in
the past business year due to restructuring and sliding prices for
chips and displays, but it sees a recovery to a net profit of 14
billion yen in the current year to March 2007.Before the announcement
shares in Seiko Epson closed down 0.32 percent at 3,070 yen and the
Nikkei average closed down 0.08 percent.