Silicon Integrated Systems held its shareholder meeting today, where Chairman Stan Hung outlined the company’s strategic plans following its reorganization last year. Historically reliant on dividends from its largest shareholder, UMC, for profits, Silicon Integrated Systems is now poised to refocus its business and strengthen its capabilities.
Stan announced that Silicon Integrated Systems will implement a cash capital reduction and refocus on competitive production lines. By the end of this year, the company expects to complete the acquisition of Lingyange Semiconductor, an ASIC design service company based in Jinan, Shandong. This acquisition is anticipated to bolster Silicon Integrated Systems’ ASIC capabilities significantly.
Stan emphasized that the company has no immediate plans to further reduce or increase capital. Instead, the focus will be on maintaining a competitive and forward-looking product line. The capital reduction process will be executed in three steps, starting with a 35% reduction, followed by a refocusing on essential production lines.
The acquisition of Lingyange Semiconductor is a strategic move, given Lingyange’s robust presence in the Chinese market and stable profitability. Last year, Lingyange reported revenue of 1.3 billion yuan and profits exceeding 200 million yuan. This acquisition is expected to enhance Silicon Systems’ market position and profitability.
Stan candidly noted that while significant industry changes cannot be achieved overnight, he is confident in the company’s gradual growth. Last year, Silicon Integrated Systems reported after-tax earnings per share of NT$0.76 and plans to distribute a cash dividend of NT$0.3. Along with the proposed cash capital reduction, shareholders are expected to receive NT$3.8 per share.
A substantial portion of the cash this year will be allocated towards the capital reduction due to the oversized share capital. Silicon Integrated Systems aims to retain appropriate cash reserves and plans to increase the dividend payout rate next year.
The strategic reorganization and refocusing efforts underscore Silicon Integrated Systems’ commitment to evolving its business model and enhancing shareholder value through targeted acquisitions and efficient capital management.
