2024-11-18 18:17:43 :
Semiconductor chip maker Polymatech Electronics will spend nearly $300 million to complete two acquisitions in the United States and France in the next few months to expand its global business.
Ewara Rao Nandam, founder of Polymatech Electronics said Mint The acquisition will be funded through a combination of internal accruals and external investment from potential equity investors.
“We plan to expand our U.S. semiconductor manufacturing facilities next year and will make an acquisition in Grenoble, France, which will materialize in the next three to four weeks. These two facilities will cost approximately $200-300 million,” he explain.
In August, Singapore-based Artificial Electronics Smart Materials Pte Ltd, a wholly-owned subsidiary of Polymatech, acquired California-based Nisene Technology Group, one of the oldest manufacturers of silicon and silicon carbide wafer integrated circuits. Polymatech currently produces sapphire semiconductors. Nandam detailed that Nisene is expected to receive equity investment to expand the facility, which will produce silicon carbide and sapphire wafers, high-performance central processing units (CPUs) and graphics processing units (GPUs) for computers and mobile phones. .
Nandam added: “We have been approached by a number of US funds to invest in Nisene, with a minimum investment amount of about $50-100 million.” The company is considering technology acquisitions in the UK.
Improve wafer technology capabilities
These acquisitions will give the company multi-wafer technology capabilities, giving it an advantage over global competitors. Polymatech manufactures different types of optical semiconductor chips (also known as photonics) on wafers such as silicon, silicon carbide and gallium nitride, working with OSRAM GmbH, Broadcom Inc, Samsung, Lite-On Technology, Lumileds Holdings, Toshiba Electronic Devices and Storage companies compete with other global players.
The Chennai-based company designs, manufactures, packages and assembles semiconductor chips and chip modules for various applications including medical, agriculture, large area lighting, PCs, laptops and mobile phone backlighting. It also exports to the US, UK and the Middle East.
The company continues to plan $1,500-crore IPO, but is likely to take place after the acquisition is completed. Promoters including Nandam hold about 80% stake in Polymatech, of which 2.6% is held by Nav Capital Emerging Star Fund. Mint It was reported earlier this year that the company planned to raise double the amount of capital it had previously planned and would refile with the Securities and Exchange Board of India (Sebi) within this year.
Nandam said that as Polymatech has expanded its operations from its two manufacturing units in Chennai to Singapore, Bahrain, the US and Europe through different companies, the company is reorganizing to bring these companies under one holding entity.
“We have appointed KPMG to do the restructuring and they will present to the merchant bankers on our behalf. Wherever we have factories, all this financial data has to be transferred to Polymatech India and consolidated. This will take six to seven months ,” he said, noting that the prospectus would be filed after that.
Polymatech revenue nearly doubles $Approximately Rs. 1,200 crore in FY24 $650 crore in FY23. In fiscal 2022, its revenue was $125.87 Crore. The company expects revenue to double annually due to expected growth in chip demand over the next few years. In addition, its chip packaging production capacity expanded by 1 billion in FY24.
Main points
- The acquisition will be funded through internal accruals and external investments from potential equity investors.
- Polymatech produces sapphire semiconductors. Polymatech’s U.S. subsidiary Nisene is expected to receive equity investment to expand its U.S. factory, which will produce silicon carbide and sapphire wafers, high-performance CPUs and GPUs for computers and mobile phones.
- Polymatech is also considering technology acquisitions in the UK.
- The company’s competitors include Osram Ltd., Broadcom Inc., Samsung, Liteon Technology, Lumileds Holdings, and Toshiba Electronic Equipment and Storage Corp.
- The chipmaker continues to plan $1,500-crore IPO, but is likely to take place after the acquisition is completed.
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