When you are the PM's Wife - IPO $16 to $2.66 and years of losses

[Sammyboy RSS Feed]

An honorable member of the Coffee Shop Has Just Posted the Following:

When I heard about Western Digital shutting down, it brought back memories of our talented PM's wife. As Dhanabalan said - she had the courage to cut losses early when her first foray, Micropolis went under shortly after it was acquired with losses in the millions.


https://groups.google.com/forum/#!to...B_SHRdkTemasek to suffer heavy loss from sale of Chartered Semiconductor to Abu
Dhabi's ATIC
September 7, 2009 by admin
Filed under Top News
Leave a comment

From our Correspondent

Singapore's semiconductor industry had floundered in recent years with
mounting losses caused by reduced demand and intense competition from
Taiwanese and U.S. chipmakers, a situation exacerbated by the global
financial crisis.

Once the crown jewel of Singapore inc, Chartered Semiconductor has struggled
to make a profit in the last two years.

Chartered Semiconductor was created in 1987 as a venture that included
Singapore Technologies Engineering Ltd., another state-linked company owned
by Temasek Holdings.

When its shares were first floated in the market in 1999, they were sold in
the pricing range of between $16 and $18 a share. 10 years later, it is
worth only $2.66 per share. (Source: IPO Investor)

Advanced Technology Investment Co., an investment company owned by Abu
Dhabi, will pay S$2.68 ($1.86) a share in cash for Chartered Semiconductor.
It will spend a total of S$2.5 billion to buy Temasek's stake of 62 per cent
or 930 million shares in the company.

In Monday's statement, the companies said Temasek fully supports the
acquisition by ATIC and will vote in support of the transaction.

Taking $17 as the IPO price of Chartered Semiconduct, Temasek may lose up to
S$13 billion dollars from the deal. (also read here)

Abu Dhabi plans to combine Chartered Semiconductors with Globalfoundries
Inc., a venture ATIC created with Advanced Micro Devices Inc. last year.

Temasek will be relieved to be rid of an unprofitable company which is
encountering difficulties to keep itself afloat. In January this year,
Chartered Semiconductors retrenched 600 workers in Singapore. (Source: CNA)

Chartered Semiconductor today also raised its third-quarter forecasts for
revenue and earnings. Revenue will range from S$405 million to S$415
million, up from a forecast of S$382 million to S$394 million, according to
a statement.

The company now anticipates results to range from a net loss of S$8 million
to breakeven, an improvement from a loss of S$27 million to S$17 million.
Chartered Semiconductor has reported losses in the previous four quarters.

Globalfoundries Chief Executive Officer Doug Grose will run the combined
operations, ATIC said. Chartered Semiconductor CEO Chia Song Hwee will be
chief operating officer and will be in charge of integrating the operations.

Ironically, Mr Chia said that Chartered has a chance of breaking even in the
third quarter ending Sept. 30, noting that the company has upgraded its
outlook for the period amid improving market conditions.

Globalfoundries has been facing an uphill battle against No. 1 player Taiwan
Semiconductor Manufacturing Co. and second-ranked United Microelectronics
Corp., both of Taiwan. It currently has just one manufacturing base in
Dresden, Germany, and has a weak client base with just AMD as its primary
customer.

By adding Chartered, analysts said Globalfoundries would gain access to a
broader set of clients like Broadcom Corp. and Qualcomm Inc., and position
itself for growth with a US$4.2 billion plant in New York state that could
be fully ramped up within as early as three years.

This may very well put Globalfoundries in a position to pose a legitimate
threat to TSMC and UMC in the contract chip manufacturing market later down
the road. (Source: WSJ)

The semiconductor industry was once touted as a key industry for Singapore
in the 1990s as it shifted away from low-cost manufacturing and electronics
industry to high-end technologies.

It was not known how much money the Singapore government had invested
initially to set up Chartered Semiconductor's operations.

Despite a good start, Chartered Semiconductor soon find itself up against
larger players in a field dominated by Taiwanese chipmakers.

Temasek's exit from Chartered Semiconductor will mark the dawn of the
semiconductor industry in Singapore and yet another blemish on its record
under the leadership of Ho Ching after Shin Corp, ABC Learning, Merrill
Lynch and Barclays Bank


Click here to view the whole thread at www.sammyboy.com.