re: 1193.HK (HK listed) - China Resources Logic - HK$0.77
PRC SEMICONDUCTOR MAKER - PART #5
NEWS ARCHIVE
2003-08-28 Chartered in US$33m deal to sell equipment and technology to CSMC Tech
URL : channelnewsasia.com
Chartered Semiconductor Manufacturing has revealed the Chinese firm it is shipping its older equipment to next year. It is CSMC Technologies, which will pay Chartered US$33 million, or S$58 million, in cash and shares.
Chartered's equipment and technologies will be transferred to CSMC's Wuxi plant. With the deal, it will end up owning 11.5 percent of CSMC. Chartered aims to transfer its technology and decommission equipment at its Fab 1 wafer fabrication plant in Singapore by April 2004.
Chia Song Hwee, Chief Executive Officer, Chartered Semiconductor, said: "If our relationship can be solidified as we execute to this agreement, we could see ourselves expanding this relationship to, for example, cover the 8-inch production capability and where Chartered can play a more significant role in the relationship and having more presence in the China market."
CSMC Tech is a joint venture between Central Semiconductor Manufacturing and China Resources Logic. CSMC Tech plans to scale up its monthly wafer capacity from 20,000 to more than 45,000 by mid-2005.
2003-08-05 - Chinese semiconductor foundry, CSMC, secures US$67m first round investment from international consortium
· CSMC the leading six-inch IC foundry services company in China / pioneer of open foundry business model in China
· Funding a strong endorsement of the CSMC business and its management team and well-timed to take advantage of global semiconductor industry recovery
· The high-growth Chinese semiconductor industry offers significant benefits to both domestic and international customers
CSMC Technologies Corporation (CSMC), the leading 6-inch Chinese IC foundry services company, today announced that it has closed a US$67 million first investment round with a consortium of international investors. The round was led by 3i, the global venture capital / private equity investor, and Crown Crystal Investments Limited (CCI), a company representing the interests of one of the largest technology focussed venture capital management firms in Asia.
China Resources Logic, currently CSMC’s largest shareholder, committed follow-on investment with the consortium, which also includes IFC, the private sector arm of the World Bank Group and a private equity fund managed by Templeton Asset Management Limited. The transaction gives the consortium a significant minority shareholding in CSMC (in addition to existing stakes in the business). Proceeds will primarily be used to fund capital expenditure in expanding CSMC’s growing business as it becomes a leading international manufacturer of mature technology integrated circuit wafers.
Headquartered in Wuxi, a major electronics hub near Shanghai, CSMC employs over 700 staff and offers integrated circuit manufacturing, foundry management and operating services to a range of domestic and international customers. CSMC opened China's first open semiconductor foundry in 1997, providing CMOS logic and mixed mode IC manufacturing services to fabless IC design houses & integrated device manufacturers (IDMs). The company reached break-even in May 1999 after 15 months of operation - a remarkable feat in the international semiconductor foundry sector.
Commenting on the investment, Peter Chen, CSMC’s Chairman & CEO said, “This investment is a significant endorsement of CSMC’s business model and international strategy, and comes at a time when we are seeing signs that the industry is set for significant recovery. CSMC is well placed to leverage this opportunity – and when combined with China’s strategic strengths in the global marketplace and a world-class management team we are confident of future success.” He added, “We are very happy to have been able to secure such a strong set of investors, who bring far more than just simple capital to the table. We have worked very closely with 3i and CCI for some time in putting together this exciting round. They are working with a team of investors who complement each other extremely well and will be able to bring significant added value to the table as CSMC forges ahead in our quest to become a recognised global player.”
Mr Song Lin, Chairman, China Resources Logic, said “We are bullish about the PRC semiconductor industry and the open foundry business. The presence of CR Logic and other renowned international investors will add value to CSMC and its strong management team. The foundations of CSMC are being laid and reinforced in the PRC as stepping stone to reach world class status eventually.”
Commenting on the investment round, Jamie Paton, 3i’s Director, North Asia said, “We are very pleased to have the opportunity to partner such a strong management team and to work with a business which has significant growth potential. Our investment is just the first step in what we hope will be a long and productive relationship. We look forward to working closely with the team and our fellow investors in leveraging our industry experience and global network in helping CSMC develop new customers, partners and markets and to ultimately achieve significant international success.”
Javed Hamid, Director of IFC’s East Asia and Pacific Department added, “IFC’s first investment in China’s electronics sector, at a time of difficult global market situation, demonstrates IFC’s commitment to supporting the Country’s effort in building a strategic industry that encourages long term economic development. China has the potential to build commanding position in the electronics sector, as it evolves into the hub of global electronics manufacturing. IFC’s support of CSMC’s investment will encourage further investments in the sector and thus help realize this potential.”
Dr. J. Mark Mobius, Managing Director of Templeton Asset Management Limited said, “Templeton is very pleased to be investing in CSMC with its strong management team and business potential. We continue to invest in such private equity investment opportunities in China, that is increasingly important as a global manufacturing hub and a large addressable domestic market, and in other emerging markets globally.”
The deal comes at a time when many observers believe that the industry is poised for recovery. China's semiconductor market has grown about 30% pa from US$2.4bn in 1995 to US$15bn in 2002, making it the world's third largest semiconductor market behind the US and Japan. Despite this strong growth, it is estimated that current domestic supply can only meet less than 20% the demand in China. According to Gartner, this market is expected to continue growing at a rate of about 20%pa to reach US$31bn in 2006.
China's domestic demand and the global trend to outsourcing manufacturing to China are expected to drive growth in this segment of the market. Foundries currently account for approximately 20% of the world's IC. However rapid growth of fabless design companies and increased IDM outsourcing are forecast to be major drivers of the foundry industry development in the next 5 to 10 years according to Goldman Sachs, who also estimate that about 40% of the world's IC will be produced by independent foundries by 2010. Demand also continues to grow in the consumer electronics sector. In recent years, China has become a major hub for global electronics production, accounting for c25% of the world's consumer electronics goods. China's domestic consumer electronics market is experiencing robust growth as the industry begins to reach a critical mass of middle-class consumers. Growth is also being driven as global OEMs, ODMs, and EMS companies look to take advantage of China’s expertise and low manufacturing costs in this segment of the market.
For more information please contact:
Burson Marsteller
Katherine Wong (Hong Kong) T:+852 2963 6728E:katherine_wong@hk.bm.com
Belina Tan (Beijing) T:++8610 65056363x266 E:belina_tan@bj.bm.com
CSMC
Frank Lai, CFO, T: +852-2668 9369E: frank@csmc.com.cn
3i
Hamish Bell (Asia) T:++65 6438-3131 / +65 9839 0284E:hamish_bell@3i.com
Ingrid Tighe (UK/EU) T: +353 1664 1686E: ingrid_tighe@3i.com
Katja Gerht (US) T: +1 (650) 470-3210E: katja_gehrt@3i.com
IFC
Prasad Gopalan (Hong Kong) T:+852 2509 8110E: pgopalan@ifc.org
Karin Finkelston (China) T:+8610 65544191,
Kremena Tenev (Washington) T:+1 202 458 5466E:ktenev@ifc.org
Templeton
Seow Choong Huei, T:+65 6338-7177E:cseow@templeton.com
China Resources Logic
Janus Lam T:+852 2299 9153E:janus@crc.com.hk
NOTES TO EDITORS
About CSMC www.csmc.com.cn
Founded in December 1997 by an experienced team of international semiconductor industry professionals led by Dr Peter Chen, CSMC offers integrated circuit foundry services for China and the international markets. Pioneering the open foundry business model in the PRC, CSMC provides fab capacity for a growing number of design houses that need IC fabrication capacity and integrated device manufacturers that outsource their production. Seed-funded by China Walden Ventures together with the founders, CSMC currently has over 100 individual & institutional shareholders.
About 3i
3i is a leader in international venture capital and private equity investment. Listed on the London Stock Exchange (FTSE 100 / MSCI Eurotop 300), 3i has almost 900 staff working from offices across Asia, Europe and North America and has been partnering entrepreneurs for sixty years. Over that time, we’ve invested over US$23 billion (included co-invest funds) in more than 14,000 growing businesses. As at March 2003, our portfolio included investments in 2,000 businesses worth over US$8 billion (incl. co-invest funds) and almost US$4.5 billion of third party funds under management. Focussed purely on venture capital and private equity investing - across a wide range of stages, sectors and geographies - our business is on helping businesses succeed. Our focus is on businesses with high growth potential and strong management. Our aim is to add value beyond simple capital – leveraging our experience, unrivalled international network, strong capital resources and industry credibility to help businesses succeed.
About CCI
CCI represents the interests of one of the largest venture capital management firms in Asia Pacific. It makes direct equity investments in high-tech and high-growth companies in the Pacific Rim. The company focuses on high-tech investments in the Asia-Pacific region and Silicon Valley, maintaining a focused investment strategy targeting four industries: semiconductors, internet, telecommunications and personal computers & peripherals.
About IFC www.ifc.org
Established in 1956, IFC is a member of the World Bank Group and promotes sustainable private sector investment in developing countries as a way to reduce poverty and improve people’s lives. With US$2.45 billion in authorized capital, IFC is the largest multilateral source of loan and equity financing for private sector projects in the developing world. It promotes sustainable private sector development primarily by (i) financing private sector projects located in the developing world; (ii) helping private companies in the developing world mobilize financing in international financial markets and providing advice and technical assistance to businesses and governments. IFC's committed portfolio in China, including amounts held for participants in syndicated loans, is $595 million. IFC's strategy in the country is to encourage model and high-impact investments that expand the role of the private sector, set high standards in governance and operations, and address the needs of poorer people and regions. Apart from providing financing, IFC will play a critical developmental role by ensuring that CSMC’s environmental and social practices meet the Chinese and international standards.
About China Resources Logic www.crlogic.com.hk
China Resources Logic (CR Logic) is one of four HK listed subsidiaries of China Resources Holdings, a large Chinese conglomerate. CR Logic is principally engaged in technology manufacturing with two distinctive business segments, air-conditioner compressor and semiconductor. It is one of the top four suppliers of air-conditioner compressors in China with a market share of about 10%. CR Logic’s semiconductor business is one of the largest PRC enterprises in the consumer electronics segment and consists of Semico, a leading fabless IC design house in China together with investments in a number of 4-inch and 5-inch Chinese fabs focused on bipolar and discreet IC products.
About Templeton www.templeton.com
Templeton Strategic Emerging Markets Fund LDC is the private equity fund managed by Templeton Asset Management Ltd., the Emerging Markets Group within Franklin Templeton Investments (FTI). FTI, with US$ 287.0 billion of assets under management, is dedicated to investment management and is one of the worlds largest independent listed fund managers. The Groups parent company, Franklin Resources Inc., trades on the New York Stock Exchange under the ticker symbol BEN and it holds a Standard & Poor’s rating of A+, the highest in its industry peer group. Templeton Asset Management Ltd. has research offices in 11 countries staffed by a team of 29 investment professionals worldwide
CSMC Raises $67M
2003-08-05 - JIANGSU, China -- Chinese semiconductor foundry, CSMC, secures US$67m first round investment from international consortium
· CSMC the leading six-inch IC foundry services company in China / pioneer of open foundry business model in China
· Funding a strong endorsement of the CSMC business and its management team and well-timed to take advantage of global semiconductor industry recovery
· The high-growth Chinese semiconductor industry offers significant benefits to both domestic and international customers
· Consortium led by 3i, the global venture capital / private equity investor, and Crown Crystal Investments Limited (CCI)
· Transaction gives the consortium a significant minority shareholding in CSMC (in addition to existing stakes in the business).
· Proceeds primarily to fund capex in expanding growing business as becomes a leading international manufacturer of mature technology IC wafers
Peter Chen, Chairman & CEO, CSMC
“This investment is a significant endorsement of CSMC’s business model and international strategy, and comes at a time when we are seeing signs that the industry is set for significant recovery. CSMC is well placed to leverage this opportunity – and when combined with China’s strategic strengths in the global marketplace and a world-class management team we are confident of future success.” He added, “We are very happy to have been able to secure such a strong set of investors, who bring far more than just simple capital to the table. We have worked very closely with 3i and CCI for some time in putting together this exciting round. They are working with a team of investors who complement each other extremely well and will be able to bring significant added value to the table as CSMC forges ahead in our quest to become a recognised global player.”
Jamie Paton, Director, North Asia, 3i
“We are very pleased to have the opportunity to partner such a strong management team and to work with a business which has significant growth potential. Our investment is just the first step in what we hope will be a long and productive relationship. We look forward to working closely with the team and our fellow investors in leveraging our industry experience and global network in helping CSMC develop new customers, partners and markets and to ultimately achieve significant international success.”
Central Semiconductor Manufacturing Corp. (CSMC)
2003-09-05 China Resources Logic Books 25% Rise in H1 Profit to US$11.2 MLN
HONG KONG, 2003- Sept-05 Asia Pulse - China Resources Logic Limited (SEHK:1193) has recorded a 25 per cent on-year increase in profit attributable to shareholders for the six months ended June 30 to HK$88 million (US$11.28 million).
The company also announced that its unaudited consolidated turnover for the same period amounted to HK$1,108 million, representing an increase of 49 per cent over the prior corresponding period. Its gross profit margin was maintained at 22 per cent. The group said the satisfactory results were mainly due to the increased contribution from its enlarged semiconductor business, resulting from the acquisition of related operations in 2002.
During the six months under review, the turnover contribution to the group from the semiconductor business amounted to HK$465 million, representing an increase of 294 per cent from that of the same period in the prior year.
The semiconductor business' contribution to the group in terms of operating profit and profit attributable to shareholders for the period under review increased from 7 per cent to 44 per cent and from 10 per cent to 58 per cent respectively. The outstanding performance of semiconductor business has partly offset the adverse impact of less than satisfactory results of the compressor business, the group said in a press statement.
To further tap into the expanding semiconductor market in China, CR Logic has restructured its semiconductor open foundry business.
In August 2003, CR Logic announced the formation of CSMC Technologies Corporation (CSMC-Tech) with Central Semiconductor Manufacturing Corporation and invited a consortium of well-known international investors to invest in CSMC-Tech, thereby broadening the shareholder base and enhancing the value of its semiconductor investment.
In the same month, CSMCTech entered into an agreement with one of the world's top three dedicated semiconductor foundries, the Singapore-based Chartered Semiconductor Manufacturing Ltd. for equipment sale, technology transfer, and customer referral.
The market situation during the first half of 2003 of the group's compressor business has improved when compared to that of the second half of 2002, when the residential air-conditioner market in China experienced severe price competition, the group said.The compressor business continued to make a significant contribution to the group's operating profit in the first half of 2003, and remained as one of the top four suppliers of residential air-conditioner compressor in China, with a market share of about 10 per cent.
CR Logic's board of directors resolved not to declare the payment of dividend for the six months ended June 30, 2003.
2003-09-05 Logic rationalizes income on chip sales (China Daily)
China Resources Logic (1193.HK) posted strong first half results yesterday thanks to enhanced sales of its semiconductor business. CR Logic, a sister of State-controlled China Resources Enterprise, said its first half-earnings rose 25 per cent to HK$87.6 million (US$11.2 million) from a year earlier.
The enlarged profit contribution of its semiconductor operations jumped 48 per cent from a year ago, as a result of strategic acquisitions in 2002. The acquisition of additional semiconductor operations last year has laid a solid foundation for the company's long-term development and profit growth, said Chairman Song Lin.
CR Logic's capital expenditure, most of which is related to the semiconductor business, will rise to HK$400-HK$500 million (US$51-US$64 million) next year from HK$300 million (US$38 million) this year, said Vice Chairman and Chief Executive Officer Zhu Jinkun.
He said the company's subsidiary CSMC Technologies Corporation is producing about 23,000 to 25,000 six-inch chips per month, and intends to increase production to 30,000 chips by the end of the year.
CSMC Technologies signed a technology transfer agreement last month with Singapore-based Chartered Semiconductor Manufacturing, acquiring two production lines for six-inch chips. He estimated the semiconductor business will grow to account for 60 per cent of the group's revenue by 2007 from 42 per cent now.
At the same time, its compressor unit's contribution to the total turnover dropped by 21 percentage points to 52 per cent.
CR Logic entered into agreements with Sanyo Electric in June to sell compressor products to the Japan-based firm for 3 years via its subsidiaries.
"The collaboration with Sanyo Electric will not only provide us with a solid customer base and a steady source of income, but will also bring long-term benefits to our compressor business in both local and overseas markets," said Song.
2003-08-05 China Resources Logic To Restructure Its Semicon Ops
Dow Jones International News By Ruby Chan
HONG KONG -(Dow Jones)- China Resources Logic Ltd. (H.CRL) said Tuesday it plans to restructure its semiconductor operations and invite international investors to take up a maximum of US$83 million in equity in the foundry business.
The Hong Kong-listed company, a subsidiary of Chinese conglomerate China Resources Holdings Co., said it is also paving the way for an eventual initial public offering for the restructured semiconductor business in the next few years.
"It is the intention of CSMC-Technologies to seek a listing of its shares on a suitable stock exchange within the next few years," said China Resources Logic Chairman Lin Song. As a first step in the proposed restructuring, China Resources Logic will form a 50-50 joint venture, namely CSMC Technologies Corp., with Central Semiconductor Manufacturing Corp.
Parallel to the restructuring, China Resources Logic said several international investors will subscribe for redeemable convertible preferred shares in CSMC-Technologies, up to a maximum value of US$83 million.
"We expect that the international investors will boost the standing of CSMC-Technologies and bring their global connections and expertise into CMSC-Technologies," Song said.
3i Group plc, Crown Crystal Investment Ltd., 3i Asia Pacific Technology LP, CCI, International Finance Corp., and Templeton Strategic Emerging Markets Fund LDC are among the participating international investors.
China Resources Logic said the subscription will be carried out in three tranches, with US$67 million as the first tranche.
On completion of the restructuring, CSMC-Technologies will be valued at US$95 million. China Resources Logic will hold a 32.8% stake in CSMC-Technologies, Central Semiconductor will hold 27.3%, and other investors will hold 39.8%.
2003-03-17 Upgrade to mark CR Logic expansion
Financial Times Limited, All Rights Reserved
South China Morning Post via NewsEdge Corporation : China Resources Logic (CR Logic) plans to speed up expansion of its semiconductor business this year by upgrading production facilities and restructuring operations in Hong Kong and the mainland.
Newly appointed chief executive Zhu Jinkun said the expansion, which required capital investment of about 300 million yuan (HK$281.6 million), was aimed at enlarging the contribution of its semiconductor business to the group's bottom line, as well as tapping the vast mainland market.
China's semiconductor market was estimated at 140 billion yuan last year, driven by substantial demand from consumer electronics and home appliance manufacturers.
However, Mr Zhu said domestic manufacturers had only a 20 per cent share of the Chinese semiconductor market.
He said semiconductor business would account for 50 per cent of group turnover this year, up from 15 per cent last year. "We hope semiconductors will account for up to 70 per cent of the group's total sales in the next two years," he said. Mr Zhu was previously responsible for the strategic planning, business development and operation of the semiconductor business before taking on the chief executive job in January.
CR Logic would use its mainland subsidiary Wuxi China Resources Microelectronics to accelerate development of its semiconductor business, he said. CR Logic bought Wuxi China - one of the country's largest semiconductor enterprises - in December last year to strengthen existing operations in Shenzhen and Hong Kong. Mr Zhu said CR Logic would upgrade capacity at the Wuxi plant.
CR Logic is owned by unlisted China Resources Holdings, a unit of the Ministry of Foreign Trade and Economic Co-operation. Mr Zhu said Wuxi China was studying possible co-operation with international firms to improve corporate management. Acquisitions would be another option for expansion.
Mr Zhu said the company's primary focus was on semiconductors but it would consider new investments if the right opportunity arose.
Publication: South China Morning Post
Distributed by Financial Times Information Limited - Asia Africa Intelligence Wire
2003-5-16 07:50:00 p.m. HKT, AFX
HK's China Resources Logic semiconductor business provided 40 pct of Q1 sales
HONG KONG (AFX-ASIA) - China Resources Logic Ltd (1193.HK) deputy chairman and CEO Zhu Jinkun said the company derived 40 pct of its first quarter revenue from its semiconductor business in the first quarter, up from 28 pct at the end of last year.
He expects this proportion to reach 50 pct by the end of this year.
Separately, Zhu said the company has sold a total of 1 mln air conditioner compressors in the first quarter, against 800,000 sold the year earlier. The average selling price declined 15 pct from the same time last year but increased 5-10 pct from the fourth quarter last year.
peter.chan@afxasia.com
cc-ec/ptc/rf
2003-4-2 06:45:00 p.m. HKT, AFX
China Resources Logic to spend 300 mln hkd in semiconductor business in 2003
HONG KONG (AFX-ASIA) - China Resources Logic Ltd (1193.HK) deputy chairman and CEO Zhu Jinkun said the company will focus on developing semiconductor business and expects to invest 300 mln hkd in the segment this year.
He said he wishes that the semiconductor business will contribute sales of the company to 60 pct in 2007, while that of air-conditioner compressor to contribute the remaining 40 pct.
In 2002, the semiconductor business accounted for 28 pct of the company's sales, while air-conditioner compressor comprised 56 pct of sales.
Zhu said it is planning to add one air-conditioner compressor production line this year, adding that he expects the production capacity to increase to 3.1 mln units from the current 2.8 mln units.
He did not give details of the investment amount.
susanna.tai@afxnews.com
gl/st/shw
2003-10-2 11:41:00 a.m. HKT, AFX
China Resources Logic signs technology license, equipment purchase deals
HONG KONG (AFX-ASIA) - China Resources Logic Ltd said it has signed technology licensing and equipment purchase deals to boost the group's air conditioner compressor business and help it expand its maekrt share in China and the export markets.
China Resources Logic said its unit China Resources (Shenyang) Sanyo Compressor Co Ltd signed an equipment purchase contract with Sanyo Electric Co Ltd and Toyota Tsusho Corp, and a separate technology license agreement with Sanyo Electric.
Under the equipment purchase deal, China Resources Sanyo will be able to acquire equipment from Sanyo Electric and Toyota Tsusho to raise its annual output of rotary compressors to 500,000 units from 300,000 units.
The equipment purchase contract is worth 13.45 mln hkd, to be paid in installments, China Resources Logic said.
China Resources Sanyo will also pay Sanyo Electric an amount not exceeding 710,000 hkd within 30 days after the delivery of certain specific plans. The company said it does not expect royalties for the technology licensing deal to exceed 10 mln hkd, or 3 pct of the book value of the group's net tangible assets.
China Resources Logic said its compressor business contributed significantly to its 2002 operating profit. Sales volume in the first half of 2003 rose 48 pct year-on-year to 2.07 mln units.
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