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Toshibas Sale of Its Malaysia Plant to Amkor Delayed by Thailand Flooding

Flooding in Thailand has delayed the proposed purchase of Toshiba’s semiconductor assembly plant in Malaysia by Amkor Technology.

In September, the two companies signed a “non-binding memorandum of understanding” under which Amkor would acquire Toshiba Electronics Malaysia (TEM), a semiconductor assembly operation. The sale was subject to the signing of definitive agreements and receipt of any necessary government approvals. Toshiba and Amkor had expected to close the sale by early January 2012.

However, flooding has damaged several Toshiba facilities in Thailand resulting in the company transferring production to other facilities in Japan and Malaysia. As a result, Toshiba postponed the sale.

“We understand and respect Toshiba’s decision to postpone our negotiations at this time while they focus on the more immediate business needs created by the flood, ” said Ken Joyce, Amkor’s president and chief executive officer.

Established in 1973, TEM has steadily expanded the scale of its assembly operations, primarily of discrete and analog semiconductors. In recent years, its main product has been power semiconductors.

Under the deal, Toshiba will continue to subcontract power semiconductor assembly and testing to TEM. Amkor reported that the transaction would further strengthen its relationship with Toshiba and to grow its semiconductor assembly and testing business.

Amkor, based in Chandler, Ariz., is a provider of semiconductor assembly and test services to semiconductor companies and electronics OEMs.