In its efforts to strike more growth within the Chinese semiconductor market, Photronics, Inc. (NASDAQ:PLAB) has enlisted a partnership with Dai Nippon Printing Co., Ltd. The two will form a joint venture, which will primarily lay its emphasis on serving semiconductor manufacturers in China. However, venture, which will go by the name Photronics DNP Mask Corporation Xiamen (PDMCX), is yet to be endorsed as it awaits the approval of customary closing conditions.
The new agreement outlines the acquiring of 49.99% of Photronics’ wholly foreign-owned entity in Xiamen, China, by a subsidiary of DNP.
The combination is in the interest of developing the industry infrastructure
“The growing importance of the China semiconductor market requires that we bring superior global resources and a broad spectrum of cutting edge technologies …….. to best ensure our customers’ success,” says the chief executive officer of Photronics, Peter Kirlin.
This alone explains the purpose of the combination, which apart from serving the industry infrastructure will also be extended to benefit the local customers. PDMCX will feature the state-of-the-art photomask manufacturing facility and it is expected to begin production operations by the end of 2018. Each of the two parties of the venture is expected to make a cash contribution towards investment into the facility.
Joint efforts accomplish much more
The Corporate Officer of DNP, Mitsuru Tsuchiya says that the cooperation is worth it. There is much more to accomplish in a joint relationship than separately. Tsuchiya emphasizes that the partnership will bring more commitment technology and manufacturing strength, given that the two companies have different levels of expertise.
The joint venture will also be beneficial to shareholders according to Kirlin who says they will be able to offer improved capital efficiency. It is worth noting that the China semiconductor is growing rapidly, thus, the need to have a broad spectrum of cutting edge technologies. The incorporation of superior global resources and methods will allow access to world-class customer support.
Photronics has been playing a significant role in the production of photomasks, which are being used in the transfer of circuit patterns onto semiconductor wafers. Meanwhile, Photronics stock was trading at $10.35 witnessing an increase of $0.10 or 0.98%.