Microchip buys IC-assembly firm

SAN JOSE, Calif. - Microchip Technology Inc. has acquired Millennium Microtech Thailand, a provider of assembly and test services for semiconductor manufacturers.

Millennium Microtech, a Thai company, was incorporated in 1999. The company operates an IC packaging and testing plant located nearby Bangkok.

It also operates in China. Millennium Microtech (Shanghai) Co. Ltd., a 51 percent subsidiary, was incorporated in 1995 in China under a Sino-foreign JV agreement. MMS operates an IC packaging and testing plant located in Shanghai.

Microchip itself operates a backend plant in Thailand, but the facility is running out of space, according to the company. Microchip decided to buy the firm instead of building its own plant, the company said.

On Thursday, Microchip, a provider of microcontroller and analog semiconductors, reported stellar results for the three months and fiscal year ended March 31, 2011.

''The Millennium MicroTech Thailand acquisition helped the revenue beat as
MMT added $2 million to revenue (though zero EPS contribution) in the March
quarter,''analyst Doug Freedman of Gleacher & Co., in a report.

Consolidated net sales for the fourth quarter of fiscal year 2011 were $380.0 million, up 3.3 percent sequentially from net sales of $367.8 million in the immediately preceding quarter, and up 36.7 percent from net sales of $278.0 million in the prior year’s fourth quarter.

GAAP net income from continuing operations for the fourth quarter of fiscal year 2011 was $130.6 million, or 65 cents per diluted share, up 28.1 percent from GAAP net income of $101.9 million, or 52 cents per diluted share, in the immediately preceding quarter, and up 72.4 percent from GAAP net income of $75.7 million, or 40 cents per diluted share, in the prior year’s fourth quarter.

Consolidated net sales for the fiscal year ended March 31, 2011 were a record $1.487 billion, an increase of 56.9 percent from net sales of $947.7 million in the prior fiscal year. On a GAAP basis, net income from continuing operations for the fiscal year ended March 31, 2011 was a record $429.2 million, or $2.20 per diluted share, an increase of 97.8 percent from net income of $217.0 million, or $1.16 per diluted share in the prior fiscal year.

“In the March 2011 quarter our microcontroller business performed at the high end of our expectations, with revenue up 4 percent on a sequential basis, and up 17 percent from the year-ago quarter,” said Ganesh Moorthy, chief operating officer, in a statement. “Our 16-bit microcontroller business was up 24 percent sequentially and was up 86 percent from the year ago quarter. Our 32-bit microcontroller business was up 35 percent sequentially and was up 226 percent from the year-ago quarter. Our analog business was up 3.5 percent sequentially, and was up 45 percent from the year-ago quarter.

Net sales in the June 2011 quarter are expected to be up sequentially between 1 percent and 6 percent.