Inventory of the top ten M&A events in the touch panel industry in 2014

With the rapid development of smart phones, tablet PCs and other electronic products, touch screen applications are almost everywhere, and a large number of manufacturers hope to gain a share in the field of touch panels. In particular, in recent years, the development of the touch panel industry in China has made rapid progress. New production capacities have been exerted by Taiwan and mainland China manufacturers such as TPK and Ophelia. However, the demand in the terminal market has not been as expected, and the touch panel market has been facing overcapacity pressure. The market is in a chaotic situation. The manufacturers are stuck in the price war in the Red Sea. The excess profits have no longer generated excess profits, and the industry reshuffle has increased. The touch panel market is undergoing dramatic changes, and exit and entry are constantly evolving.

Dongshan Precision enters the touch panel acquisition of 300 million Mudong photoelectric

Dongshan Precision announced on January 14, 2014 that the company’s wholly-owned subsidiary, Dongshan Hong Kong, plans to acquire 100% equity and some intellectual property rights of MOGL, which is held by MuDong Optoelectronics, for US$51 million. At the same time, Mengdong Optoelectronics plans to transfer 12 intellectual property rights related to R&D and production of new touch display screens to Dongshan, Hong Kong at no charge.

According to the announcement, MOGL's main business is touch panel sales, and its customers have covered such well-known companies as Hewlett-Packard, ZTE, Huawei, TCL, and Lenovo. The two parties agreed that Mudong Optoelectronics shall unconditionally cooperate with Hong Kong Dongshan to successfully undertake all its business, including but not limited to the transfer of customers and suppliers; after the completion of the settlement, MOGL will have an independent overseas raw material procurement and overseas product sales system, and its operating conditions are expected to be promising. Significant improvement.

The acquisition of MOGL means that Shandong Precision will be involved in the field of touch panels. Dongshan Precision believes that this transaction will cultivate new profit growth points and increase the overall supply capacity of the branded products through vertical integration, which will increase the touch on the brand manufacturers and display the full-fit products. However, given that the company spent 136 million yuan in 2010 in the United States shares SolFocus. Inc.'s involvement in the photovoltaic industry led to a net profit in 2012 that changed from pre-benefit to loss. This time again spending heavily on cross-border mergers and acquisitions, may need to be more cautious to avoid "preceding the game."

Changxin Science & Technology acquires 400 million to expand touchscreen business

Changxin Technology announced on the evening of January 19, 2014 that the company issued shares to Shenzhen Deputt Optoelectronics Display Technology Co., Ltd. (DPT Photoelectric) to purchase its holdings of Shuozhou Depute Technology Co., Ltd. (Luzhou Depu Special) 100% equity. The underlying asset of the transaction was Chenzhou Deputy's final transaction price of 400 million yuan. Industry sources said that they are optimistic about the complement of DPT and Changxin Technology in the touch screen business.

On June 3, 2013, Shenzhen Depot Optoelectronics held its first extraordinary shareholders' meeting in 2013. All shareholders agreed to transfer 100% equity of Zhangzhou Deputt to Changxin Technology. On January 7, 2014, 100% of the equity of Zhangzhou Deputed was transferred to the name of a listed company. Zhangzhou Deput became a wholly-owned subsidiary of Changxin Technology.

In the acquisition plan, the company and Deputt agreed that the non-deductible net profit in 2013, 2014 and 2015 would be no less than 39.94 million yuan, 52.97 million yuan and 67.88 million yuan, if the actual net profit in the year was less than the promised net profit. The compensation for profits is made by means of share compensation. There should be a certain degree of contribution to the future growth of the company.

HannStar Color Crystal acquires its subsidiary 5.3G touch panel factory

In January 2014, HannStarDisplay, a manufacturer of large-sized LCD panels in Taiwan, announced the acquisition of its 5.3G touch panel factory, which is part of the company's HannStar Color Touch Solutions. The plant is located in the southern Taiwan Science and Technology Industrial Park, of which 1.425 billion Taiwan dollars (48,100,000 US dollars) for the acquisition of land and buildings, 2.8 billion Taiwan dollars (94,720,000 US dollars) to buy its fixed property.

Hao Yu Cai Jing said that the company will step into the production of on-cell touch panels. The acquisition of 5.3G touch panel factory aims to integrate 5.3G panel production. It plans to start production of on-cell touch panels in the second quarter of 2015, mainly focusing on 4-6-inch panels for smartphones. Hao Yu Cai Jing said that the company will also produce on-cell touch panels for tablet PCs.

Ophey's $50 million acquisition of Tessera and DOC

O Feiguang announced on the evening of March 26, 2014 that the company intends to acquire US Tesla Technology Co., Ltd. (Nasdaq under the symbol "TSRA", or "Tessera") and the wholly-owned subsidiary DigitalOptics Corporation through its subsidiary Hong Kong O-fibre Technology. The company (referred to as "DOC") owns specific assets, patent ownership and licenses, etc. The total transaction price is 50 million US dollars.

According to the agreement, this acquisition includes: DOC's MEMS-based imaging system-specific assets; DOC's Flip Chip, WLO (Wafer Level Optics) and MO (Micro Optics) and camera modules; more than 280 patent ownerships; DOC's MEMS And other related patent licenses for camera modules; licensing of Tessera's FotoNation business software features.

It is reported that Tessera is a leading technology company in the semiconductor industry and DOC is its wholly-owned subsidiary. DOC's main business is designing and manufacturing MEMS-based imaging systems for smartphones while providing efficient and advanced image processing software. After the completion of the acquisition, Ophelia will enable the company to provide differentiated high-quality products in the camera field, continue to enhance the company's future core competitiveness in the consumer electronics industry and broaden the company's product line.

Duntai Tech Mergers & Acquisitions Xuyi is only an in-cell ticket

On April 7, 2014, Duntai Technology, the world's largest manufacturer of touch-control chips, announced that it will acquire drive-chip manufacturer, Asahi Technologies, through a share conversion method, and the ratio of shares will be converted to one share of Duntai Technology's common stock. Re-issue 4.8 shares of Asahi Tech's common stock. The base day for mergers and acquisitions and share swaps is tentatively scheduled for January 2, 2015.

The merger and acquisition of Asahi can accelerate the integration of Duntai touch ICs and LCD driver ICs, laying a foundation for serving the in-cell market, and of course, on-cell products. Duntai and Xuxun had previously developed IC products with integrated touch and display functions. However, in view of Xu Hao's own situation, due to the lack of accumulation in the touch field, the progress of research and development was not as expected. It is complementary technology.

After the announcement, on the following day, Duntai Technology's share price fell 6.98 percentage points, the market value evaporated 1.157 billion Taiwan dollars (equivalent to about 237 million yuan), Xu Hao Technology fell 4.84 percentage points, the stock price movement reflects the investor's lack of confidence in the merger and acquisition program .

Liquid crystal giant Merck acquires An Zhi Electronic Materials

On April 30, 2014, China’s Ministry of Commerce approved the purchase of AZ Electronic Materials by the German chemical and pharmaceutical giant Merck KGaA for US$2.6 billion.

The Merck KGaA was founded in 1668 and has a history of about 350 years. It is the world's oldest family-owned pharmaceutical chemical company. However, it is little known that Merck is the world's largest liquid crystal material for flat panel displays. It provides 60% of the world's liquid crystal materials and is widely used in LCD TVs, notebook computers, monitors, mobile phones, smart phones and other instruments and equipment. Anzhi is a world-leading manufacturer and supplier of high-quality, high-purity specialty chemicals for the high-growth electronics market. Products are widely used in integrated circuits, flat panel displays, light emitting diodes, and the printing industry.

Analysts in the industry said that An Zhi's optoelectronic business will complement Merck's display business structure. The two companies have some common customers, including Samsung Electronics, Sony, Panasonic, and Taiwan's Innolux Corp. According to Zachert, Merck's financial director, this transaction will enable Merck to acquire new customers, such as Korean semiconductor manufacturer SK Hynix Inc.

Shen Tianma's 5.5 billion acquisition of five subsidiary companies will be listed as a whole

Deep Tianma's asset restructuring plan was announced in May this year. Through targeted private placement and the acquisition of shares in five subsidiaries, Shen Tianma will achieve overall listing and become one of the leading panel makers in the domestic A share market.

The company plans to purchase 70% equity interest in Shanghai Tianma, 90% equity interest in Wuhan Tianma, 40% equity interest in Chengdu Tianma, 100% equity interest in Shanghai Optoelectronics, and 100% equity interest in Shenzhen Optoelectronics. The transaction price of the underlying assets was 5.496 billion yuan, the issuance price was 12.69 yuan per share, and the number of new issuance of shares was expected to be 430 million shares (excluding the number of matching financing issuance shares). Shen Tianma intends to raise matching funds at the same time. The matching financing amount does not exceed 25% of the total transaction amount.

The acquisition of shares of the five subsidiaries means that Shen Tianma has achieved overall listing and can expand the "platters" of listed companies to further fund the capital market, and can also increase profits and enrich product lines. Once Shen Tianma completes the overall listing, it is expected to become the “troika” of the panel industry in the domestic A-share market together with BOE and China Star Optronics.

Apple acquires LED display manufacturer LuxVue

In May 2014, Apple confirmed that it had acquired LuxVue, an energy-efficient LED display manufacturer. It has been a mystery as to how much Apple paid for the acquisition of LuxVue. However, at the time, the company had raised a total of US$43 million. It is reported that the LuxVue team will join Apple's hardware innovation department.

The LED display produced by LuxVue does not consume much power, so in theory, Apple can apply this technology to the production process of iPhone and iPad screens to improve the battery life. An Apple spokesperson confirmed the acquisition but used only Apple’s usual statement about the acquisition and did not explain the purpose or plan of the acquisition.

U.S. touch-screen chip maker Syno acquires Japanese chip maker Renesas SP Drives

In June 2014, Synaptics, the US manufacturer of touch screen chips, announced that it will spend US$475 million to acquire Japanese smart phone chip maker Renesas SP Drives.

It is reported that Synopsys has been mainly engaged in the production of touch panel control chips and module product lines. In recent years, it has actively entered the portable consumer electronic product market, and is a supplier of Samsung Electronics, LG Electronics, and Nokia. Renesas SP Drives, a company that produces chips for controlling small and medium size LCD screens for smartphones and tablets, is one of the world's largest manufacturers of such chips and is the exclusive supplier of display driver chips for Apple's iPhones. According to Synopsys, the acquisition of the Renesas SP Drives company's transaction will be completed in the fourth quarter of 2014, and said that the acquisition will not only increase its market opportunities by 50%, but also accelerate its progress in TDDI research and development.

In recent years, integrated touch display driver ICs (TDDI) with integrated display and touch functions have become the forefront of the industry. This product can make mobile devices thinner and lighter. Driver ICs or touch IC manufacturers are increasing the research and development of TDDI chips in order to win orders from major mobile phone manufacturers.

Touchscreen chipmaker Atmel acquires Newport Media to enter the Internet of Things

Touch IC maker Atmel announced on July 7, 2014 that it agreed to buy Newport Media, a manufacturer of low-power wireless communication chips, for US$140 million, in order to blow the horn into the IoT market. With the completion of the transaction, Atmel acquired a vote of semiconductor technology vendors, hoping to find their own position in the "Internet of Things" wave.

Atmel company said that after the collection of Newport team, Atmel immediately has 802.11n Wi-Fi and Bluetooth design capabilities, will be able to accelerate the development of low-power Bluetooth product timelines, is conducive to gaining an early opportunity in the Internet of Things. Its chip with Newport's gear can be used in a variety of products, from home and building automation equipment to consumer electronics devices that require longer battery life. Analyst Schreiner expects the IoT product volume will continue to rise between 2017 and 2018, and also states that the purchase price is “somewhat expensive”.

Insiders believe that the new thinking is expected to become the key to Samsung's defeat of Apple, or may be expected to rely on this acquisition to become Apple's supplier again.

Editor's note:

Looking back at the development of the touch display industry in 2014, overcapacity, low profitability and increased competition have become the main tone. Most people in the industry believe that the touch display industry is entering the "winter." M&A and restructuring will become the norm in the industry, and this trend will become more frequent in 2015.