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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.
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