MediaTek plots to buy rival MStar Semiconductor

MediaTek has outlined plans to buy rival MStar Semiconductor.

The top handset chip designer has said it is willing to spend $3.84 billion (NT$115 billion) on the company, money it hopes will broaden its product portfolio and give its rivals – Qualcomm  and Spreadtrum Communications – a run for their money.

As part of the acquisition MediaTek is reported by the Taipei Times to be offering
0.794 of a MediaTek share and NT$1 in cash for every MStar share.

MediaTek chairman Tsai Ming-kai, said: “The merger will combine the advantages and resources of the two companies.

“The combination will enhance global competitiveness and maximise our product lineup. This is the most important target.”

He added that competition in this market was getting stronger, with smartphones beginning to take huge dominance over traditional handsets, meaning that handset chip manufacturers had to up their game and make “smart” products for this technology and also for the TV market.

MStar makes TV chips and accounts for around 50 percent of the world’s digital TV chip market. Over the past few years the company has also made a name for itself in the mobile-phone chip and set-top box chip markets.

The merger would makeit  the world’s fourth-biggest chip designer, making MediaTek a serious force to be reckoned with.