Silicon Integrated Systems, a prominent IC design firm, announced its plan to acquire the entire equity of fellow IC design company Hycon Technology Corporation through a stock exchange. The exchange ratio is set at 1 Hycon Technology ordinary share for 0.8713 shares of Silicon Systems, representing an approximate 18% premium based on Silicon Systems’ closing price of NT$66.7 on August 5. This move is part of a broader strategy to integrate resources and expand Silicon Systems’ operational scale.
Silicon Integrated Systems will issue 27,755,080 new shares for the merger, valuing the transaction at approximately NT$1.85 billion (US$58 million). The merger will involve no cash expenditures, and the share conversion base date is set for January 1, 2025. Post-merger, Silicon Integrated Systems will be the surviving entity, while Hongkang will be delisted.
The merger announcement followed a temporary suspension of trading for both companies on August 5, during which major briefings were held to disclose the details. Established in 2007, Hycon Technology’s major shareholders include Chairman Po-Yin Chao and his family, who hold a nearly 10% stake, and Liu Bowen, who holds approximately 7.25%.
Silicon Integrated Systems’ CFO, Huang Bowen, explained that the merger would significantly enhance Silicon Integrated Systems’ product offerings by incorporating Hycon Technology’s expertise in battery management chips, mixed-signal microcontroller chips, and capacitive touch chips. This integration will broaden Silicon Integrated Systems’ customer base and market reach.
Huang emphasized that research and development (R&D) is crucial for IC design firms. The merger will enable both companies to share R&D resources, combining Silicon Integrated Systems’ strengths in somatosensory and sound perception technologies with Hongkang’s expertise in low-noise, high-precision analog-to-digital conversion. This collaboration aims to improve chip performance and provide comprehensive solutions to expand market opportunities.
Huang also highlighted the importance of collaboration with wafer foundries and packaging services in the IC design industry. Silicon Integrated Systems’ longstanding partnerships with foundries will offer Hycon Technology enhanced support in developing niche processes, while Hycon Technology’s product quality will strengthen Silicon Integrated Systems’ supply chain management.
Both companies will hold a shareholder meeting on October 9 to discuss the merger. Once the share conversion is complete, the total issued shares of Silicon Integrated Systems will increase to 514,988,161. This merger positions Silicon Integrated Systems to deliver improved solutions and services, solidifying its market presence.
