SAN FRANCISCO—Hua Hong Semiconductor Ltd. and Grace Semiconductor Manufacturing Corp., China's second and third largest foundries behind Semiconductor Manufacturing International Corp., said Thursday (Dec. 29) that they completed a merger between the two companies.
Hua Hong and Grace entered into a legally binding agreement to effect a merger between the two companies on Sept. 13, the companies said. The merger was completed with a stock-for-stock transaction, with Hua Hong issuing new shares to the existing shareholders of Grace in exchange for all Grace outstanding shares. Other terms of the agreement were not disclosed.
The Reuters news service reported early this month that the two companies had agreed on a merger that was awaiting regulatory approval. Market research firm iSuppli Corp.—now known as IHS iSuppli—said more than two years ago that Grace and Hua Hong were set to merge.
"Hua Hong and Grace are two of the leading players in the Chinese semiconductor foundry industry, both of which have fabs in Shanghai Pudong area," said Fu Wenbiao, now chairman of both Hua Hong and Grace. "By integrating their manufacturing facilities, process technologies and human resources, Hua Hong and Grace are able to leverage their complementary strengths to further expand their combined product range and customer coverage and to improve economies of scale."
Wenbiao said the combined company would be able to provide a broader range of services to customers and have increased capacity and R&D capabilities.
The combined pro forma revenue and net income for 2011 is expected to be around $600 million for Hua Hong and $100 million for Grace, the companies said.