Sigurd Microelectronics has announced plans to wholly acquire fellow IC assembly and test service company UTAC Taiwan for NT$4.62 billion (US$165 million), and expects to complete the deal in second-quarter 2021.

Sigurd chairman Sidney Huang said it will take three months for the acquisition deal to clear regulatory procedures, which can be done in the first half of the second quarter at the earliest.

The takeover of UTAC Taiwan, a subsidiary of Singapore-headquartered United Test and Assembly Center offering backend services for mixed-signal ICs, RF chips, logic ICs and memory chips, will enable Sigurd to ease its tight capacity supply, expand its market shares, and strengthen its memory and automotive chips testing capability, according to Huang.

Huang noted that Sigurd has seen clear visibility for backend orders for 5G chips, networking chips, power management ICs, and automotive chips throughout 2021. In particular, he continued, the revenue contribution for its automotive chips testing business is likely to surge to 20% in 2021 from 15% in 2020 amid the growing recovery in global car sales.

After completing the acquisition, Sigurd is estimated to see its testing capacity expand by 40-50% and annual revenues increase by NT$2 billion, advancing the company one notch up in Taiwan's OSAT firm rankings to sixth place, according to industry sources.