SPIL and Hon Hai Precision Industry Co., Ltd. Entered into a Letter of Intent Whereby the Parties will Form a Strategic Alliance Through the Exchange of Shares

TAICHUNG, Aug. 28, 2015 /PRNewswire/ -- Hon Hai Precision Industry Co., Ltd. (Taiwan Stock Exchange:2317.TT) ("Hon Hai") and Siliconware Precision Industries Co., Ltd. ("SPIL" or the "Company") (Taiwan Stock Exchange: 2325.TT, NASDAQ:SPIL) signed a Letter of Intent today, whereby the parties will form a strategic alliance through the exchange of shares in accordance with Article 156.8 of the Company Act. The alliance will provide customers with the best integrated service program through future collaboration on technology and business.

Hon Hai has always committed itself to providing a high technology one-stop service provider to system brand customers through vertical integration. Hon Hai stands as a world leader in precision tooling, components, equipment process design, manufacturing, assembly, sales and other vertical integration technologies. The development of microchip related integration services is also one of Hon Hai conglomerate's direction for development. SPIL is the world's third largest IC assembly and testing house, with wire bonding, flip-chip, wafer level packaging, bumping, multichip package and high-level assembly and testing technology. ShunSin, the subsidiary of Hon Hai, also owns the world-leading System-in-Package (SiP) technology.

The trend of consumer electronics development has seen an increase in demand for smaller form factor, energy saving, and high performance for products such as smart phones, wearables which all require minimizing size, weight, and better thermal dissipation. In order to achieve the above, SiP and high level IC assembly technology must be adopted and through chip to system vertical integration, actual synergy will be achieved.

Upon the formation of the strategic alliance, the parties will work together on the following items:

1. Substrate design integration to manufacture competitive products, such as Embedded Substrate, Panel Size Fan-Out WLCSP, etc.
2. SPIL will provide IC wire bonding and wafer level packaging technology combined with Hon Hai's SMT and module assembly technology in order to develop the next generation of system level assembly products to meet with future demands in smart phones, internet of things, wearables, etc.
3. Jointly develop ASIC chip, assembly, modules, etc. from the design approach, in order to accelerate the time-to-market, increase product performance and lower costs.
4. Closely collaborate on SiP related technology to fully explore its inherent commercial opportunities.

In order to maximize the synergy of the strategic alliance, the parties will also work together on the following:

1. Hon Hai's precision mold, machinery manufacturing, and automation technology will enhance SPIL's industry competitiveness.
2. Hon Hai's unique thermal dissipation technology can improve SPIL's thermal dissipation process in IC packaging.
3. As future mobile devices will be equipped with more functional modules such as fingerprint recognition, MEMS application, and high resolution camera, the miniaturization of SiP will become the major trend of the next generation IC packaging. Hon Hai and SPIL will closely cooperate and seek for a win-win partnership.

After the exchange of Hon Hai and SPIL shares, Hon Hai will hold 840,600,000 SPIL shares, accounting for 21.24% shares of SPIL, post capital increase; and SPIL will hold 359,230,769 Hon Hai shares, accounting for 2.20% shares of Hon Hai, post capital increase.