Alpha and Omega Semiconductor Limited (AOS) has entered a joint venture (JV) with the state authority of Chongqing, China to build a power semiconductor manufacturing facility in the Liangjiang New Area of Chongqing.
Under the agreement, AOS would own 51% of the equity in the facility and would contribute its existing assembly and test equipment as well as certain intellectual property (IP) needed in the operation of the factory. The Chongqing authority would own 49% of the JV’s equity and invest in cash. The initial cost of the JV is expected to be about $300 million, AOS says.
The JV is expected to begin manufacturing operations in 2017 with AOS gradually moving its assembly and test equipment from its existing facility in Shanghai to the lower-cost Chongqing region. The Shanghai facility will continue to operate as AOS’ supply chain management and technology center for high-value products. At a later date, the JV expects to construct a 12-inch fab for the production of power semiconductors, the company says.
Dr. Mike Chang, chairman and CEO of AOS, says in a statement that the JV will bring cost savings to AOS and allow for a reduction in tangible assets as well as “open doors to new customers and expand our sales in China, and particularly in the Chongqing area.” Chang says the deal is an important step in AOS’ strategy to improve its long-term profitability by “accelerating growth, reducing costs and diversifying our offerings of power semiconductor products.”
Questions or comments on this story? Contact email@example.com