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Tongfu Microelectronics and U.S.-based Advanced Micro Devices (AMD) establish an integrated circuit packaging and testing joint venture.

Release date:

2015-10-17

On October 15, 2015, Tongfu Microelectronics signed an equity purchase agreement with U.S.-based Advanced Micro Devices (AMD). Under the agreement, Tongfu Microelectronics plans to acquire approximately 85% of the equity in Advanced Micro Devices Technology (China) Co., Ltd. (hereafter referred to as "AMD Suzhou") and Advanced Micro Devices Export Sdn. Bhd. (hereafter referred to as "AMD Penang"), investing about US$370 million through its acquisition platform—though the exact amount will be finalized at the time of closing. Upon completion of the acquisition, Tongfu Microelectronics, as the controlling shareholder, will jointly establish an integrated circuit packaging and testing joint venture with AMD.

On October 15, 2015, Tongfu Microelectronics signed an equity purchase agreement with U.S.-based Advanced Micro Devices (AMD). Under the agreement, Tongfu Microelectronics plans to acquire approximately 85% of the equity in both Advanced Micro Devices Technology (China) Co., Ltd. (hereafter referred to as "AMD Suzhou") and Advanced Micro Devices Export Sdn. Bhd. (hereafter referred to as "AMD Penang"), investing around US$370 million through its acquisition platform—though the exact amount will be finalized at the time of closing. Upon completion of the acquisition, Tongfu Microelectronics, as the controlling shareholder, will jointly establish an integrated circuit packaging and testing joint venture with AMD. The transaction is still subject to approval from relevant government authorities and is expected to close in the first half of 2016.

AMD Suzhou and AMD Penang primarily engage in high-end integrated circuit packaging and testing services, with key products including CPUs (central processors), GPUs (graphics processors), APUs (accelerated processors), and Gaming Console Chips, among others. Packaging options include FCBGA (flip-chip ball grid array), FCPGA (flip-chip pin grid array), FCLGA (flip-chip land grid array), MCM (multi-chip module packaging technology), and more—among which advanced packaging solutions account for 100% of their offerings.

The joint venture will serve as AMD's primary packaging and testing supplier, continuing to deliver high-quality, cutting-edge packaging and testing services to AMD. At the same time, the joint venture will fully leverage AMD's strengths in production, technology, and quality management systems, offering scalable, customized, and advanced packaging and testing solutions tailored to the sophisticated needs of both domestic and international customers. Ultimately, the joint venture aims to evolve into a leading OSAT company with significant influence in the high-end packaging and testing sector.

Tongfu Microelectronics General Manager Shi Lei stated that AMD possesses world-leading flip-chip packaging and testing technology, with its flagship products widely used in high-end applications such as laptops, desktops, servers, premium gaming consoles, and cloud computing centers. This complements Tongfu Microelectronics' independently developed flip-chip packaging and testing solutions tailored for the communications and consumer markets, significantly enhancing Tongfu's capabilities in this area and enabling the company to offer the most comprehensive range of flip-chip packaging and testing services. These advanced technologies, combined with Tongfu Microelectronics' already established large-scale production capabilities in bumping technology, will further strengthen the company's service offerings and competitive edge in the high-end packaging and testing segment. Moreover, this strategic collaboration with AMD through the establishment of a joint venture will bolster Tongfu Microelectronics' global influence and industry standing, accelerating its journey toward becoming a world-class packaging and testing enterprise.

AMD Senior Vice President and CFO Devinder stated that AMD will continue its strategic innovation by establishing a joint venture, combining AMD's state-of-the-art packaging and testing facilities—along with its highly experienced workforce—with Tongfu Microelectronics' expertise in semiconductor outsourcing for packaging and testing. Tongfu Microelectronics is our ideal partner, and we’ve already outlined clear goals and a robust business plan for the joint venture’s operations post-transaction, ensuring its path to success.

Regarding Tongfu Microelectronics

Tongfu Microelectronics was established in 1994 and is headquartered in Nantong City, Jiangsu Province, China. It ranks among the top three IC packaging and testing companies in China, and more than half of the world’s top ten semiconductor manufacturers are its customers. The company currently offers advanced packaging and testing technologies such as Bumping, WLCSP, FC, BGA, and SiP, alongside traditional packaging solutions like QFN, QFP, and SO. Additionally, Tongfu Microelectronics provides specialized packaging services for automotive electronics and MEMS products. Its testing capabilities encompass both wafer-level testing and system-level testing. Tongfu Microelectronics was the first domestic Chinese packaging and testing firm to achieve large-scale production of the entire post-process flow for 12-inch 28-nanometer mobile processor chips, covering key steps including Bumping, CP, FC, FT, and SLT. Tongfu Microelectronics is listed on the Shenzhen Stock Exchange under the stock abbreviation "Tongfu Microelectronics" and carries the stock code "002156."

Regarding AMD

Founded in 1969, Advanced Micro Devices (AMD) is headquartered in Sunnyvale, California. AMD specializes in designing and manufacturing innovative microprocessors, flash memory, and low-power processor solutions tailored for the computing, communications, and consumer electronics industries. Committed to delivering customer-centric, standards-based solutions, AMD serves a diverse range of technology users—from enterprises and government agencies to individual consumers. With operations spanning across the globe, AMD maintains manufacturing facilities in the U.S., China, Germany, Japan, Malaysia, Singapore, and Thailand, employing more than 16,000 people worldwide. Over 70% of AMD’s revenue comes from international markets, making it a truly global multinational corporation. The company is publicly listed on the NASDAQ Stock Market in the U.S., under the ticker symbol AMD.

Barclays Bank, China Merchants Securities, GF Securities, King & Wood Mallesons, and Crowe Horwath provided effective intermediary services for this transaction.

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