Solomon Systech Invests In C2 Microsystems
Strategic Introduction of New Product Line as Growth Engine; Well Positioned to Tap into Booming Internet TV Market
(Hong Kong – 9 August 2011) – Solomon Systech (International) Limited (“Solomon Systech” or “the Company”; SEHK: 2878) announced today its investment in C2 Microsystems Inc. (“C2”), a leading fabless semiconductor company focusing on the development and sales of System-on-Chip solutions (“SoC”) for Internet TV. The investment is a strategic move aiming to introduce a new product line, Internet TV, as one of the growth engines of the Company given the booming Internet TV market, as well as to capitalize on the synergies created to further strengthen the Group’s overall competitiveness and business development.
According to the agreement, Solomon Systech has subscribed approximately 24.0% of the issued share capital of C2 at a consideration of US$9,000,000 (approximately HK$69.75 million), funded by the Group’s available cash-on-hand.
Dr Humphrey Leung, Group CEO of Solomon Systech (International) Limited, said, “The global focus is now on Internet TV. Internet TV is not simply another type of TV. It allows consumers to enjoy multiple combinations of TV and Internet functions. It offers brand new, innovative multimedia user experiences, or a new lifestyle, that consumers increasingly sought after. For example, while you are watching a live soccer game on Internet TV with a group of friends, you may go to Facebook to chat with others about the game. Your family may also Skype with your relatives overseas, and share with them your favorite photos and videos on a large LCD screen in 3D format. We believe that this new market trend will bring us huge opportunities.”
“C2 is a pioneer in the development of technologies for the delivery of content over the Internet,” said Dr Jinxiang (Gene) Liu, CEO of C2 Microsystems Inc. “The investment by Solomon Systech announced today is both a validation of C2’s market and product vision and the beginning of a dynamic new partnership to accelerate the introduction of innovative products to tap into the potential of this large and fast growing market.”
Based on DisplaySearch’s report, the Internet TV market is projected to demonstrate robust growth, with shipments estimated to reach nearly 138 million units worldwide in 2015. From 2011 to 2015, the accumulated Internet TV shipment is expected to be about 500 million units and the CAGR about 23%. Leveraging C2’s market-ready Internet TV technologies and established relationships with the manufacturers of major Chinese and global TV brands, Solomon Systech is well positioned to capitalize on the surging Internet TV market.
Synergistic move to drive future growth
Solomon Systech’s current Large Display business and Green Power business’ LED backlight solutions are expected to create synergies with C2’s Android system on TV SoC solutions, which enable the Company to provide total IC solutions for its customers in the TV/Large Display business. On the other hand, the Company’s Display System Solution business unit focuses more on SoC solutions for mobile multimedia applications, while C2 specializes on SoC solutions for Internet TV. The Group will enjoy enhanced cost effectiveness as both parties share a similar set of technology requirements and intellectual property. The Group can develop and license key IPs, software and applications jointly with C2.
Launch of new product line to realize income
C2 has started the promotion of its latest TV SoC and has received encouraging market response. This new product is believed to be the first true Android system on a single TV SoC in China. With an optimized Android system and capabilities to support numerous Internet and advanced TV functions, the new TV SoC is securing early design-wins with TV manufacturers, which not only would strengthen C2’s financial position but also generate revenue for the Group in the foreseeable future.
“The new product synergies subsequent to the investment will present numerous business opportunities for Solomon Systech. The Internet TV market enjoys promising prospects. We believe Internet TV as a new market segment will become one of our important growth engines, enabling us to capture the enormous potentials of the Internet TV market as well as boosting our overall business development,” concluded Dr Leung.