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ASM International front-end business stays put...for now |
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Nov 28, 2006 at 12:19 PM |
ASM International's "extraordinary" meeting of shareholders certainly lived up to its name yesterday.
With proposals on the table to split off the semiconductor front-end equipment group from the company, the stockholders sided with management, keeping the company intact.
ASM's management shrewdly announced on November 24 that they are changing the financial reporting structure of the company, giving more transparency to the front-end unit by separating its results from the more profitable back-end division. This move undercut institutional investor Mellon HBV's efforts to spin off the front-end assets, which seemed to placate the majority of shareholders who voted against the Mellon proposal.
Whether ASM's profitability-challenged front-end group can hit the black remains an open question. The back-end unit's profits have carried the company for many a quarter in recent years. The company as a whole has deep technology and many competitive product lines. The strength of ASM's patent portfolio ranked second only to Applied Materials' IP among semiconductor equipment manufacturers, and ninth overall, in IEEE Spectrum's recent patent survey.
One way or another, ASM's front-end group must stand on its own, either as an ongoing concern within the parent company, a stand-alone spin-off in some future as-yet-to-emerge scheme, or as part of a merger or acquisition with another capital equipment supplier.
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