*NEWS*EPSON TO BUY OUT IBM’s CHIP BUSS

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*NEWS*EPSON TO BUY OUT IBM’s CHIP BUSS

 user 2006-06-26 at 11:05:00 am Views: 91
  • #15862

    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.