A late-in-the-day dispatch
yesterday of this column noted how "wild card" assets finally might be getting value at
. Several years ago both participated in a joint venture with Taiwan's
, a private Taiwanese company that runs a semiconductor plant. Only problem: There was no way to put a value on the investment because United Semi was private.
Then, yesterday, United Micro announced plans to buy United Semi and several other joint-venture fabs in return for United Micro stock, which is traded in Taiwan. Based on the price of United Micro's publicly traded stock, analysts calculated attractive values for the S3 and Alliance holdings.
S3 and Alliance, as it turns out, weren't the only U.S. semi companies to hold stakes in the fabs being bought by United Micro.
, for example, owns 9.3% of
United Integrated Circuits
. Same goes for
, which holds 9.3% of United Integrated assets as well. (Meanwhile,
Integrated Silicon Solution
agreed to sell its position in United Integrated back to United Micro in April for its original acquisition cost, although it says it will record a gain of about $1.8 million in the June quarter on the sale. Timing is everything!) Then there's
, which actually records its proportional interest in
, another United Micro venture, as part of its own income.
Adding to the intrigue was United Micro CEO John Hsuan's comments, reported by
, that efficiencies created by consolidating the fabs could cause his company's earnings to double next year.
The purchases are part of United Micro's efforts to play catch-up to
, whose ADRs are the closest thing U.S. investors can get to a pure play in fabs. Most U.S. semi companies have ditched their fabs over the years. (See my colleague
story on the semi shakeout.) "It used to be that foundries were nothing more than glorified
," says analyst Tad LaFountain of
Needham & Co.
"But during the past down cycle, Taiwanese foundries kept investing, and what they've done is shifted the bar on a process technology basis. So instead of being technology laggards, foundries are now leaders, because they can do as sophisticated a process as virtually any semi company."
Which is why U.S. companies have joint-ventured with the Taiwanese and others. Avoid the downside; participate in the upside.
No press release from Iomega
Treasurer Rob Simmons, who negotiated many of Iomega's financial deals with its banks, and chief spokesman Tyler Thatcher have left the company to join an upstart Internet operation. In addition, according to
filings, Simmons sold 56,000 Iomega shares, his remaining stake, at $4.94 a piece. What's more, Iomega still hasn't hired a chief financial officer to replace Len Purkis, who left a little more than a year ago. Iomega officials were not available for comment.
Short-seller Marc Cohodes of
, no stranger to this column, turns the tables when he interviews me live at 4:15 p.m. EDT today on his weekly show on
, an Internet broadcasting site, at
Herb Greenberg writes daily for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, though he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. He welcomes your feedback at
email@example.com. Greenberg also writes a monthly column for Fortune.