Flextronics to Buy LCD Maker for $300M

Singaporean contract manufacturer Flextronics International sees growth in making smaller display panels. It plans to buy U.S. liquid crystal display (LCD) panel maker International DisplayWorks (IDW).

Flextronics offers services ranging from the manufacture of subassemblies such as TV tuners or color displays right up to the design and production of boxed, finished electronic products.

IDW makes small monochrome LCD displays of the kind seen in cordless phones, PDAs, car audio devices and medical instruments. The displays are typically custom designed for specific products.

For Flextronics, the acquisition is a way to pursue its strategy of controlling the entire production cycle in certain vertical markets, guaranteeing its supply chain and delivering products faster, it said.

The companies expect to complete the transaction, an all-share deal worth about US$300 million, in the fourth quarter, subject to approval from regulators and IDW shareholders, they said Tuesday.

Flextronics plans to incorporate IDW’s manufacturing operations into its Components Division, forming a new business unit that will also manufacture TV tuners, TFT displays and Wi-Fi modules. IDW has factories in Beijing and Shenzhen in China, and its headquarters in Roseville, Calif.

In recent years, Flextronics has built a portfolio of specialized component manufacturing operations through acquisitions. In 2004 it began the transfer of some of Nortel Networks’ optronics design and manufacturing activities, and in February 2005 it completed the purchase of Agilent Technologies’ camera module business. However, last year it moved out of semiconductor manufacturing, selling its chip business to AMI Semiconductor.

-Peter Sayer, IDG News Service (Paris Bureau)

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