MediaTek plans to expand its communications business and acquires Ethernet and switch chip technology for NT$1.5 billion-EEWORLD

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MediaTek is actively developing its broadband communications business. On the 27th, it made another move, announcing that its broadband business subsidiary Airoha Technology would acquire 100% of the shares of Jiuyang Electronics at NT$22 per share, a premium of 15.79%. This is equivalent to spending NT$1.507 billion to strengthen its acquisition of Ethernet and switch chip technology and lay out the industrial Internet of Things battlefield.

MediaTek has a strong ambition to develop its communications business. In December, it made two consecutive moves. First, it subscribed to the private equity shares of industrial Ethernet chip company AsiaInfo Electronics for 495 million yuan through its subsidiary Airoha Technology, becoming the largest single shareholder with a 20% stake. On the 27th, it announced that Airoha Technology would be the main body to exchange shares with Jiuyang Technology. It is expected that after approval by Jiuyang shareholders' meeting, the merger base date will be tentatively set to be completed on April 30, 2021.

After the merger, Jiuyang will be delisted and become a subsidiary of Airoha. MediaTek said this move will be a positive help in the development of broadband communications. In fact, Jiuyang Electronics and AsiaInfo Electronics have the same business direction. Whether Jiuyang Electronics will further increase its shareholding in AsiaInfo and strengthen integration in the future is worth paying attention to.

Jiuyang's operating scale is not large. Its revenue in the first 11 months was 771 million yuan, a year-on-year decrease of 13.4%, the lowest in five years. It also turned to losses this year, with a loss of 148 yuan in the first three quarters. In the past 10 years, it has only made money in 3 years.

Jiuyang is mainly engaged in the research and development, design and marketing of wired high-speed and ultra-high-speed Ethernet transceivers and switches. It owns more than 70 Ethernet patents and is one of the few teams in China that has the ability to independently develop and design 10/100Mbps and Gigabit Ethernet transceivers, switches and intelligent network power supply (PoE) chips.

MediaTek invested 7 billion yuan to acquire Airoha in two phases, becoming the main player in broadband communications layout

So far, Airoha Technology has become a key chess piece in MediaTek's layout of broadband communications, both wired and wireless network communication technology. What kind of company is Airoha? Airoha Technology is currently in a public offering state. Its chairman is MediaTek's vice chairman Xie Qingjiang, and its capital is 605 million yuan.

Airoha's main products are RF wireless communication chips, including power amplifiers (PA) and Bluetooth system-on-chip (BT), WiFi radio frequency chips, low-noise power amplifiers and digital TV tuners. Among them, PA products are mainly used in smartphones.

Airoha was founded in 2001 and was the semiconductor division of BenQ in the past. MediaTek had the foresight to buy more than 30% of the shares from BenQ and became the largest shareholder. Later in 2017, MediaTek announced a public acquisition of Airoha for 110 yuan, and finally acquired it completely at a cost of 7 billion yuan. Airoha was delisted from the Emerging Market, and MediaTek integrated its own Internet of Things division into Airoha Technology.

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