THE Sarawak Government’s stake in wafer foundry 1st Silicon (M) Sdn Bhd will be reduced to 35% after the company’s merger with Germany’s X-Fab Semiconductor Foundries.
X-Fab, through holding company X-Trion, will have a 65% stake in the merged entity, X-Fab 1st Silicon Semiconductor Foundries, said state Second Finance Minister Datuk Wong Soon Koh.
He told Richard Wong Ho Leng (DAP – Bukit Assek) during question time that the merged company would have assets and plants in Germany, the United States, Britain and Malaysia.
“It will be among the top seven in the world in terms of production capacity,” he said.
Since the merger agreement was signed four months ago, he added, the state had been actively engaging X-Fab, the various domestic and international regulatory authorities and financial institutions on matters essential to finalising the merger exercise.
The minister said X-Fab had a proven profitable business model and was one of the most established market leaders in the analogue business, having strong technical expertise in niche market technologies.
According to him, the merged entity would focus on market segments where the products had a longer shelf life, better profitability, a product mix that generated positive cash flow positions and a stable selling price.
Wong added that 1st Silicon had started production of 0.13-micron wafers and was in the process of developing technology for chips for automobiles. Its products are now used in cellular phones.
Replying to Chong Chieng Jen (DAP – Kota Sentosa), he said 1st Silicon had earlier sold fixed assets to international bondholders under a restructuring exercise to improve its financial position.
“The sale of the assets resulted in a gain of over RM850mil and the proceeds have enabled the company to refinance its debts.”
The bondholders are paid annual interest of 5.7%.
Earlier, state Assistant Land Development Minister Francis Harden said the state had to date approved 41 of the 110 applications to develop native customary rights (NCR) land for oil palm plantations.
He told Joseph Mauh (BN – Tamin) the 41 applications covered over 375,000ha, adding that more than 31,000ha had been planted, and about 60% of the trees had matured.
“The Government has targeted to develop one million hectares of oil palm estates, including 400,000ha on NCR land, by 2010” he added.
Harden said the ministry had rejected some of the applications as the proposed areas covered state land or provisional leases or water catchment areas.