By MARINA EMMANUEL
KHAZANAH Nasional Bhd is in the final stages of selling a substantial stake in SilTerra Malaysia Sdn Bhd, people familiar with the matter said yesterday.
It is learnt that Kulim-based SilTerra, the country’s first chip fabrication company that is 98 per cent-owned by Khazanah, will be sold to a Chinese semiconductor player.
“Khazanah is currently awaiting nod from the government to proceed with the transaction.
If the sale goes through, Khazanah will completely lose control of the company,” a source said.
Business Times was told that the decision to sell the stake is due to the cumulative losses of RM1.7 billion made by the company since 2011.
SilTerra, however, has paid off its RM1.7 billion seven-year sukuk, which matured on June 6.
The company, with a sole foundry at the Kulim High Tech Park in Kedah, employs more than 1,000 staff and boasts a design capacity of 40,000 eight-inch wafers per month.
It has spread its wings in the global technology scene and is more well-known in Taiwan and China, and to the giants of the industry worldwide, than in Malaysia.
SilTerra is ranked 15th (based on revenue) in the global ranking of leading pure-play foundries,
where it serves the mature technology segment of the market valued at US$30 billion (RM96.6 billion) per year.
A seminconductor industry expert expressed disappointment over the potential sale.
“Now that the sukuk has been fully repaid, SilTerra has been given a chance to move forward and should be allowed to continue as a Malaysian company because its business remains viable,” he said.
The semiconductor industry has seen declining growth rates for some time now.
In the past five years, the global market for microchips, with sales volumes of US$300 billion, has grown just 2.7 per cent a year on average, versus annual growth of 3.3 per cent between 2000 and 2007.