Passive component makers Chilisin Electronics and Kemet, two associate companies under Yageo, will strengthen their technology leaderships and market positions through a share swap of their respective subsidiaries.

Under the deal, Chilisin will acquire a 100% stake in Kemet's subsidiary Bothhand Enterprise for NT$2.8 billion (US$99.5 million). In exchange, Kemet will take over Chilisin's affiliate Ralec for NT$5 billion. The deal is set to close by the end of January 2021.

Bothhand, a specialist for transformers and wave filters, generated revenues of NT$2.06 billion in 2019 with a gross margin of over 30%.

Chilisin president YC Kuo said that Bothhand's winding technology for the manufacturing of Ethernet transformers would help advance related technology at Chilisin to improve production efficiency and increase output, adding that the deal will also enhance its portfolios of power inductors and magnetic materials.

Meanwhile, Kemet is to synergize the production and marketing strengths of thick-film chip resistors at Ralec to further expand its market share. Ralec generates revenues of about NT$4.8 billion a year currently.