An epic bidding war for Silicon Valley chip company Integrated Silicon Solution Inc. ended Monday with shareholder approval of its sale to a Chinese investment consortium.
Uphill Investment will buy ISSI for about $765 million, in a deal the memory chip maker expects to close in the third quarter.
Uphill is an investment vehicle created for the deal by China-based Summitview Capital, eTown MemTek, Huaqing Jiye Investment Management, and an investment fund managed by Hua Capital Management.
The action ends a two-month battle over the company that began when Cypress Semiconductor, another valley chip company, complained that it had been excluded from the sale process and began bidding against the Chinese consortium, Uphill Investment.
ISSI was prepared to close a deal for $639 million, when San Jose chip company Cypress Semiconductor made an uninvited bid that led to offers and counter-offers and forced Uphill to raise its bid by nearly 20 percent.
ISSI said it still needs to restructure its operations in Taiwan and win the approval for the deal from the Committee on Foreign Investment in the United States.
Cypress founder and CEO T.J, Rodgers said in a letter last week that if the deal with Uphill fails to win regulatory approval, he may come back with a lower offer. In making his final offer, Rodgers acknowledged that he couldn t top Uphill, with its backing from the Chinese government.
Last year, China announced a plan to become more self-sufficient in semiconductor design and manufacture by 2020 through investment, research and acquisition. Another valley company, Omnivision, is being acquired by a separate Chinese investment group.
The sale prompted a letter from Rep. Dana Rohrabacher, R-Huntington Beach, to Treasury Secretary Jack Lew, warning that Chinese acquisitions had the potential of gutting U.S. semiconductor capability.
ISSI is a relatively small part of the U.S chip industry, specializing in a type of memory chip that it sells to automotive industry and other industrial customers. It is fabless, meaning that it does not operate its own foundry, but outsources the work.
Photo: ISSI logo
Contact Pete Carey at 408-920-5419 Follow him on Twitter.com/petecarey
