Chemtronics has been named the preferred bidder by Samsung Electro-Mechanics to buy its wireless telecommunication module business, TheElec has learned.
The deal is thought to be worth in the mid-100 billion won range. Samsung Electro-Mechanics will be handing over production facilities and equipment as well as its sales right to supply modules to Samsung Electronics’ Galaxy smartphones.
Chemtronics last year acquired Samsung Electro-Mechanics’ wireless charging module business.
This is second deal is expected to help Chemtronics’ earnings significantly. The company is expecting operating margins in the double-digits at a maximum from the wireless telecommunication module business.
This is because the company will have less fixed cost compared to when Samsung Electro-Mechanics was operating the business, people familiar with the matter said.
Chemtronics is expecting sales close to 1 trillion won next year.
Prior to being named the preferred bidder, another company that was also bidding for the business was thought to be the more likely candidate. This is because Chemtronics paid the fee of 21 billion won for the wireless charging module business in installments. The asking price of mid-100 billion won by Samsung for its wireless telecommunication module business was thought to be too high for Chemtronics.
Samsung Electro-Mechanics’ wireless telecommunication module business produces both Wi-Fi and WiGig modules. Wi-Fi uses 2.4GHz and 5GHz spectrum; WiGig uses 60GHz mmWave spectrum.
Samsung Electro-Mechanics is also planning to sell its rigid flexible printed circuit board (RFPCB) business. RFPCB is used to connect the OLED panel to a smartphone’s main board. The company supply the boards to Samsung Display, which uses them to make OLED panels to supply to Apple.