Monday, May 5, 2008

Elan to Acquire Elantech to Reinforce Touch Panel Production Capability

5 May 2008
Taiwan-based Elan Microelectronics Corp, an IC (integrated circuit) designer, has announced a plan to acquire Elantech Devices Corp, a developer of touch pads and related technology, on September 20, 2008, in a bid to reinforce its production capability for touch panels, and push up market share, according to company sources.

Yeh I-hao, Chairman of Elan, said that the acquisition of Elantech, which holds numerous patents for technologies of multi-touch panels, can help his company to achieve vertical integration in production and business this year. In other words, Elan will build integrated production lines, including touch IC designing and conductive glass and touch pad modules manufacturing, in house, and broaden its operations.

Elantech, based in Taiwan, was originally a subsidiary of Japanese passive component maker KOA Speer Electronics Inc, with a 36.77 percent controlling stake owned by Elan so far, and has ventured into production of capacitive touch panels through buying Logitech Inc`s touch pad division.

At the moment, Elantech has capitalization of NT$150 million, and Elan NT$3.618 billion. Elan is going to issue new shares in response to the acquisition and push up its capitalization to NT$4.107 billion in the future. After the acquisition, Yeh added, touch panels will contribute 15-20 percent more to Elan`s total revenue this year.

Market observers believe that Elan`s move to buy Elantech shows intense ambition to transform its original business operation of consumer IC design to touch panel manufacturing, which can help to win more patents for such product.

Yeh said that he is quite optimistic about popularity of touch panels in consumer electronics because Apple Inc`s newly launched MacBook Air and Asusteck Computer Inc`s Eee PC both adopt multi-touch panels. In fact, Elan has already delivered its multi-touch panels for UMPC (ultra mobile personal computer) and MID (mobile Internet device) to domestic notebook PC suppliers.

Source: CENS via EMasia


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