Abov Semiconductor to acquire chip testing firm Winpac 

South Korean chip fabless firm Abov Semiconductor will acquire chip testing company Winpac.

Winpac is an outsourced assembly and testing firm of SK Hynix and owned by liquid crystal display component maker TLI, which owns a majority stake.

People familiar with the matter said TLI’s side has stressed that buying Winpac could lead to Abov winning chip test orders from Samsung. 

Abov said on Tuesday that it has signed a share acquisition deal of Winpac with TLI.

The fabless will buy 14.34% shares of Winpac, including the 9.55% owned by TLI, for 24 billion won. Abov will also take part in Winpac’s equity offering to secure a further 13.6% of their shares.

In total, Abov will have a 27.94% stake in Winapc.

Abov was founded in 2006 and listed on KOSDAQ in 2009. It designs microcontroller units (MCU), driver ICs and sensors.

Last year, it recorded 144.2 billion won in revenue and 14 billion won in net income. It has been expanding into the automotive chip market with MCUs for lidar and passenger assistance systems.

Winpac went up for sales in August. The firm uses multi-chip packaging technology to offer packaging for automotive chips. It was founded in 2002 and acquired by TLI in 2011. SK Hynix accounted for 70% of its revenue last year.

As SK Hynix has reduced outsourcing testing and packaging, Winpac has also seen its earnings decline in recent years. TLI had attempted to sell Winpac multiple times for the past couple of years.

Abov can use Winpac to test its chips, which will allow it to control costs better. Also, if Winpac can win test orders from Samsung, this could offset the declining orders from SK Hynix.