Cyberjaya, 23 June 2021 – Dagang NeXchange Berhad (“DNeX”) concluded its Extraordinary General Meeting (“EGM”) today, which saw it receiving shareholders’ approval for the proposed acquisition of 60 per cent equity interest in SilTerra Malaysia Sdn Bhd (“SilTerra”) from Khazanah Nasional Berhad for a purchase consideration of RM163.8 million to be satisfied entirely by cash. SilTerra manufactures semiconductor wafers that are supplied to multinational fabless and integrated device manufacturer companies.
Shareholders also approved the proposed diversification of DNeX’s principal activities to include the manufacturing, sale and marketing of semiconductor wafers, semiconductor-related tools and other related activities.
Tan Sri Syed Zainal Abidin Syed Mohamed Tahir, Group Managing Director of DNeX, said, “We are pleased to receive shareholders’ approval for this major acquisition. Indeed, the semiconductor sector today is seeing demand firmly outstrip supply and this reality is expected to persist with increasing demand continuing up to 2024. Given the bullish outlook for the sector, this timely and strategically compelling acquisition as well as the diversification of the Group’s principal activities allows DNeX to benefit from sustained positive earnings and explore future growth potential over the medium to long term.”
“Together with our partner Beijing Integrated Circuit Advanced Manufacturing and High-End Equipment Equity Investment Fund Center (Limited Partnership) (“CGP Fund”), we look forward to growing SilTerra into a technology player capable of competing in the global marketplace. As part of our collaboration, we expect to turn SilTerra around in two years, with immediate focus on increasing plant utilisation, cost optimisation and expanding market access,” he said.
CGP Fund was established as a private equity fund in 2014 focusing on the semiconductor industry in China. Meanwhile, Beijing CGP Investment Co Ltd (“CGP”), a private and independent investment management company, is the general partner and manager of CGP Fund which is principally operating based on market-oriented principles.
CGP has the experience in acquiring strategic assets, putting in the necessary resources, and successfully turning businesses around including Silex Microsystems, and ChipOne.
DNeX aims to improve efficiencies and increase operational capacity while injecting new capital to remove bottlenecks and improve plant utilisation while leading SilTerra to ready market access including strategic customers and long-term supplier contracts by leveraging on CGP’s network.
Also in the pipeline are the adoption of technology upgrades including micro-electromechanical system (“MEMS”) and silicon photonics thus enabling change in product mix that can generate improved business margin.
“Our partnership will also act as a bridge to introduce an established ecosystem of international technology players to strengthen the Malaysian market and improve Malaysia’s position as a globally competitive player in this space,” added Tan Sri Syed Zainal Abidin Syed Mohamed Tahir.