As part of its plan to enhance deployment in the mobile-phone chip segment, MediaTek Inc. recently acquired a 41.39% stake in Airoha Technology Corp. from BenQ Corp.

The chip vendor acquired the ownership for around NT$606 million (US$18 million) at NT$62 per share, far higher than Airoha's net worth of NT$4.25 per share. MediaTek's executives pointed out that scare radio-frequency (RF) talents in Taiwan prompted their company to buy the deal at high cost.

Airoha was founded in 2001 based on BenQ's handset-chip team and shifted specialization to wireless Internet cards and personal handyphone system (PHS) chips from radio-frequency chips for GSM phones.

In the PHS market, Airoha has entered into alliances with Sunplus Technology Co., Ltd. of Taiwan and OKI Electric Industry Co., Ltd. of Japan. Partnerships have enabled Airoha's revenue to grow at an average pace of 300% in each of the past two years, to NT$250 million (US$7.5 million) in 2005. Industry watchers forecast its revenue for 2006 to reach NT$700 million (US$21 million) and earnings per share of NT$3.5.

The deal, industry watchers noted, is very conducive for MediaTek, which needs Airoha's WiFi radio-frequency technology to help it build up share in smart-phone market.

MediaTek will begin to deliver Airoha-developed WiFi chipsets soon and expect to win contracts from Motorola, Samsung and mainland Chinese handset suppliers in 2008.

The acquisition makes MediaTek Airoha's largest shareholder and brings BenQ earnings of NT$564 million (US$17 million). BenQ is currently Taiwan's No.1 fabless house by revenue and has dethroned Texas Instruments (TI), Freescale, and ADI as the world's largest supplier of low-end and middle-range handset chips.

ＢＡＣＫ