The reality of the industry is like a jungle battlefield. Eliminating the weak and retaining the strong is always the constant law. Taiwan's DRAM industry has been in turmoil by the end of 2015. After Gao Qiquan, chairman of DRAM godfather Huayaco, quit his job this year, the big

The reality of the industry is like a jungle battlefield. Eliminating the weak and retaining the strong is always the constant law. Taiwan's DRAM industry has been in turmoil by the end of 2015. After the DRAM godfather Huayaco Chairman Gao Qiquan quit his job this year, the biggest threat to Taiwan's semiconductor industry, Unisplendour, Micron immediately responded to the war situation. After acquiring all the shares of its strategic partner Huayaco, the two powerhouses of the United States and China are fighting. The remaining parts of Taiwan's DRAM industry that have not been cannibalized have already been sidelined.

Huayako's closing price today is NT$23. Micron acquired Huayake at a premium of 30% and NT$30 per share through a share swap, which is higher than market expectations and owns 24.2% of Huayako's shares. Nanya sold its equity and obtained funds of approximately NT$47.6 billion, and acquired Micron private equity for an additional NT$31.5 billion. The expected delivery date is mid-2016. Both parties believe that this is a further strengthening of the strategic partnership between Micron and Nanya. relationship, and Nanya will become an investor in Micron and obtain the option to license Micron's next-generation technology.

Why does Formosa Plastics Group want to sell? It is understood that it is beneficial to Formosa Plastics Group to complete corporate mergers and acquisitions through stock exchange. Because it is optimistic about the prosperity next year, stock exchange can also be regarded as an investment, and Formosa Plastics’ investment in Huayako is currently losing money. Micron gave Huayaco's pricing model is becoming increasingly unfavorable to Huayaco. If Micron's stock price doubles next year, it is possible to make money. Selling for cash now is not a wise move. In addition, Formosa Plastics' share swap does not count as withdrawing from the Huayaco system. , just invest in Micron instead.

So since Micron already has a close partnership with Huayaco, why did it want to acquire Huayaco? It is speculated that it may be related to the investment in flash in Taiwan, because Micron’s flash technology is cooperated with Intel, and in order to authorize Huayaco, it must obtain Intel Agree, if you become a sole proprietorship, you won't have this problem.

Finally, what investors may be concerned about is that Micron has been labeled an M&A vulture in the past. Unlike Ziguang, which acquires with cash, Micron uses shrewd calculations to acquire other companies and acquire high-end assets without spending a dime. Technology, from buying seven factories originally belonging to TI in 1998, to repeating its old tricks and acquiring Qimonda's shareholding in Huayaco in 2008. In 2013, Micron took over Elpida, which was under bankruptcy protection.

The acquisition of Elpida was originally analyzed in a special article in the Science and Technology News. Before the transaction, Micron first turned Elpida's balance sheet into a negative value, claiming that the shareholder's equity was completely eliminated after the acquisition, but in fact, after the acquisition, the original Erpida Elpida shareholders cannot get a dime from Micron, and the Japanese government also exempted Elpida from its debt, which is equivalent to handing over 240 billion yen to Micron, and the bondholders cannot get any money.

Therefore, Micron can be said to be unprecedentedly generous this time, because from the perspective of equity structure, Micron holds 32.67% of Huayake. Nanya Branch holds 24.19% of Huayake shares. In order to become a 100%-owned company of Huayaco, Micron must acquire outstanding shares in cash, with a total amount of NT$100.98 billion. If the NT$35.3 billion in cash on Huayaco's books is deducted, Micron must spend at least NT$65.68 billion. Taiwan dollar.

Micron still has US$3.5 billion in cash in the third quarter. If it needs to spend US$2 billion in cash to buy Huayaco, it will still have US$1.5 billion in cash on its books. However, based on Micron’s excellent financial operating capabilities, the required US$2 billion should be able to be achieved through syndicated loans from banks in Taiwan and abroad, without having to take out cash from pockets.

Although the news of the Micron merger was only announced today, Huayaco's stock price closed up 6.73% today at NT$23, and Nanya's stock price also rose 1.71% to US$38.65. Micron's US stocks closed at $14.04 on Friday, down 4.23%.

The shareholding ratio of Huayake's major shareholders.

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