ASIAN TECHNOLOGY NEWSLETTER DECEMBER 2007, ISSUE 53 A Quarterly newsletter of developments in the IT, semiconductor and electronics industries We hope you find the Asian Technology If you think that BDA’s services may CONTENTS Newsletter informative. be useful to you, please contact us at CHINA.......................... 1 any one of our offices or email me at BDA is a corporate finance and advisory [email protected]. Contact details HONG KONG................... 3 firm, which assists multinational clients for our offices are at the back of this INDIA........................... 3 to identify, assess and execute cross- newsletter. We look forward to speaking JAPAN.......................... 5 border transactions involving Asia, with you in the future. KOREA.......................... 5 including acquisitions, divestments, JVs, MALAYSIA..................... 6 restructuring and capital raising. We have SINGAPORE.................... 6 offices and professional staff throughout Andrew Huntley, Managing Director Asia, and in the US and UK. [email protected] China Checkpoint, the US-based provider Dynasty Gaming, the Canada-based ADC Telecom, the US-based of shrink management solutions developer online gaming software telecom software and equipment for the retail industry, has acquired and e-commerce consulting, has manufacturer, will acquire Century SIDEP, the China-based provider of agreed to acquire China-based Man Communication, the China- Radio Frequency Electronic Article Junnet Omnimedia, a digital media based provider of communication Surveillance (RF-EAS) products, along distributor, and Beijing Baihui distribution frames and accessories with its majority-owned subsidiary, Digital Stars, a digital tech support for US$55m in cash and up to Shanghai Asialco Electronics, China- provider, from private investors, Dr. US$15m in earn out payments over based manufacturer of RF-EAS labels, Wilson Cho and Dr. Dominic Chan, for the next three years. Century’s major for US$37m. The two acquisitions will a total of US$80m.The acquisition is clients include the mobile operators facilitate Checkpoint’s penetration in part of Dynasty’s strategy to focus on like China Mobile, China Netcom, emerging Asian markets and increase the Chinese market. The transaction China Telecom, China Tietong, its label manufacturing capacity is expected to close by end of 2007. and China Unicom, and OEMs like to meet growing demand in the October 19, 2007 UTStarcom and ZTE. The acquisition region. The transaction is expected will accelerate ADC’s growth in China to be EPS neutral and add US$20m Ferro Corp will begin construction in by expanding product offerings and to Checkpoint’s revenues in 2008. Q4 2007 on a 16,500 square meter adding more low-cost manufacturing November 20, 2007 facility in Suzhou, China, where facilities. The transaction is expected it will produce aluminum pastes to close by year end. November 13, 2007 for the Southeast Asia solar cell 2 ASIAN TECHNOLOGY NEWSLETTER DECEMBER 2007, ISSUE 53 manufacturing market. The new site Intel Capital, the global investment Samsung Electronics Co is is expected to begin production in arm of Intel, has invested US$10.5m considering moving its local liquid Q3 2008 and will include expansion in the China-based automated crystal display component production capacity to accommodate expected technology company SUPCON Group, line to Mainland China in 2008. The growth of Ferro Electronic Material which specializes in distributed move aims to raise the number of Systems’ business positions in China control systems. SUPCON has over LCD assembly lines in Korea, in a bid and Asia for products such as silver 5,000 clients in petrochemical, to meet the increasing demand for pastes, surface technology products, chemical, power and food processing the products. The company owns two multi-layer materials, electronic sectors. SUPCON will assist Intel in LCD module plants, which are located glass, and precious metal powders. the development and promotion of in Chonan in middle Korea and October 9, 2007 Intel’s industrial automation solution Suzhou in east China, respectively. products in China, while Intel will The latter is mainly devoted to the Glu Mobile (“Glu”), the US- support SUPCON’s global production labor-intensive work and the former based mobile games developer and sales to expand business is to turn to a technology-intensive and publisher acquired Beijing outside China. November 1, 2007 facility. Samsung Electronics plans Zhangzhong Mig Information to move most of the LCD module Technology (“MIG”), a Chinese Zip disk drive maker Iomega Corp production lines to the mainland, mobile games developer and will acquire China’s ExcelStor East Europe, India, and other low publisher, for US$39.7m, inclusive Group from a shareholder of the cost countries. December 10, 2007 of earn outs. Glu will pay US$14.7m San Diego company in an all-stock in cash with earn out up to US$25m deal that will more than double Sitronics JSC, the Russia-based in cash and stock contingent on the number of its outstanding manufacturer of consumer MIG’s earnings in 2008. Through this shares. Financial terms of the deal electronics and a subsidiary of acquisition Glu hopes to enhance its were not disclosed. Beijing-based Russian conglomerate AFK Sistema presence in the mobile game market ExcelStor is a subsidiary of Iomega Group, has acquired a 66% stake by helping MIG to expand further into shareholder Great Wall Technology in Sitronics-ZTE, the China- mobile games publishing. Co Ltd and Great Wall Technology, based manufacturer of consumer November 29, 2007 in turn, is an indirect subsidiary of electronics, from ZTE Corporation, China Electronics Corp, a Chinese the China-based manufacturer of Chinese TV maker Hisense Electric government-owned conglomerate. telecom equipment, for US$10m. Co Ltd plans to raise roughly Iomega will issue about 84 million Sitronics’ strategy is to manufacture Rmb1bn (US$135.6m) through a shares of its common stock in and market household consumer private share placement of up to 100 exchange for all outstanding shares electronic products in China at low million shares to selected investors. of ExcelStor. When the deal closes, costs. October 5, 2007 Rmb700m (US$95m) will be invested Great Wall Technology will hold a in the company’s five LCD module majority stake in Iomega owning Spreadtrum Communications, the production lines of 15-inch LCD about 43% of Iomega’s common China-based wireless chip designer, modules and 42-inch LCD modules. stock. Following the acquisition, will acquire Quorum Systems, the One will start production in 2007 with ExcelStor will operate as a wholly San Diego-based designer of CMOS a production capacity of 500k, two owned subsidiary of Iomega. radio transceivers, for US$76m. in 2008 with 1.5 million and two in ExcelStor had US$707m in revenue Quorum’s CMOS RF transceivers will 2009 with 3 million. December 13, 2007 for 2006. December 12, 2007 complement Spreadtrum’s baseband 3 ASIAN TECHNOLOGY NEWSLETTER DECEMBER 2007, ISSUE 53 technology and allow them to make Yangtze Telecom, the Canada-based consideration of US$86m. Aspocomp further inroads into the wireless telecommunication services provider agreed to contribute equipments market. There is speculation that to China and Mongolia, has agreed from its Salo plant and Meadville will China will announce 3G licenses, to acquire Hunchun VAS (HCVAS), acquire a 10% stake in Aspocomp‘s which would benefit Spreadtrum and the Jilin-based company engaged in Oulu subsidiary as part of the deal. the development of the TD-SCDMA 3G commercialization of technologies The transaction will help Aspocomp standard in China. November 20, 2007 in mobile VAS space, for US$4.8m in to improve its liquidity position by stock and earn-out payments of up to repaying its liabilities. November 8, 2007 Sumitomo Chemical will start US$24m based on HCVAS earnings manufacturing liquid crystal in 2008 and 2009. HCVAS owns two polymers intended for connectors patents in China: a push-to-talk (PTT) India and backlight bobbins in China in technology over cellular (PoC) and a January 2009. The company plans mobile phone controlled biometric Cisco Systems unveiled its to construct a 1,800 tpa tail-end technology in security systems. “Globalization Center East” campus solid-phase polymerization facility Yangtze’s acquisition of HCVAS is a in Bangalore. The company, for LCP neat resin and a 2,400 tpa step towards its goal of becoming the which spent some US$50m on compounding facility at Sumika first PoC provider in China. the new 1-million-square-foot Electronic Materials (Wuxi), Jiangsu December 3, 2007 center, now employs some 3,000 Province. Aside from an investment people in India. According to of a total of Y3bn (US$25m) for the Cisco, the campus also houses project, the company is also planning Hong Kong the largest campus datacenter a 2,200 tpa output capacity increase outside the US, and will provide to 3,200 tpa for neat resin at Taoka Li Ka-Shing, the Hong Kong owner a focal point for demonstrating Chemical, Japan. The added capacity of Tom Group, invested US$60m next-generation virtualization is scheduled to be completed by end in Facebook for 0.4% stake, with technologies and service oriented of 2008. October 18, 2007 the option to invest an additional network architectures. Cisco also US$60m in the company. The announced that it is extending Symbian, the UK-based Smartphone investment is part of Li’s strategy venture investment initiative in India operating systems company owned to forge closer relations between by another US$100m. As the first of by Nokia, Ericsson, Siemens, Sony Facebook and Tom Group. It also several potential initiatives, Cisco is Ericsson, Panasonic and Samsung, gives Facebook an entry into the fast- collaborating with Satyam Computer has acquired Chinese smartphone growing advertising market in China. Services to explore a new venture developer Beijing Genesis December 3, 2007 investment that will purportedly Interactive Technology for an focus on “optimizing, deploying undisclosed amount.