China Semiconductor IPO: BCD Semiconductor Manufacturing

| About: BCD Semiconductor (BCDS)

BCD Semiconductor Manufacturing (NASDAQ:BCDS) is a Chinese analog chip maker specializing in power management integrated circuits. The company plans to float an IPO this week.

All quotations are from the company's most recent S-1 filing with links provided.

Business Overview (from prospectus)

We are a leading analog integrated device manufacturer, or IDM, based in Greater China, specializing in the design, manufacture and sale of power management integrated circuits, or ICs. Our broad portfolio of power management ICs primarily targets rapidly growing, high-volume markets such as mobile phones, portable media players, LCD televisions and monitors, personal computers, adapters and chargers and other electronics products. As an IDM, we integrate product design and process technology to optimize product performance and cost. We offer system-level solutions with the quality, performance and reliability required by our customers. Our Greater China-based operations provide proximity to the rapidly growing electronics industry in Asia, enabling us to align our product development effort with customers and market trends and to provide timely and effective technical support.

Offering: 6.0 million shares at $9.00 - $11.00 per share. Net proceeds of approximately $52.0 million will be used for working capital and other general corporate purposes that are in accordance with our respective charter documents and any applicable business license, including expanding manufacturing capacity by building, acquiring, or otherwise arranging for additional fabrication facilities, developing new products and funding capital expenditures. In addition, the company may choose to expand current business through acquisitions of other businesses, products or technologies.

Lead Underwriters: Deutsche Bank, Needham & Co.

Financial Highlights:

Our revenue increased from $49.4 million to $69.3 million comparing the nine months ended September 30, 2006 and 2007, respectively, representing an increase of 40.3%... Our gross profit increased by $9.4 million, from a profit of $5.0 million in the first nine months of 2006 to a profit of $14.4 million in the first nine months of 2007. Our gross profit in the nine months ended September 30, 2007 constituted 20.8% of net revenue, as compared to 10.2% in the corresponding period in 2006... Our operating expenses, inclusive of amortization of share based compensation, increased by 34.4% to $12.4 million during the period ended September 30, 2007, as compared with the same period in 2006... We recorded other loss, net, of $1.0 million in the period ended September 30, 2007, as compared with other loss, net, of $1.5 million in the period ended September 30, 2006.


Our markets are highly competitive and we face significant competition for products in each of our business areas from both Asia-based and international companies. We compete with global analog IDMs, such as Fairchild Semiconductor International, Inc. (FCM), National Semiconductor Corporation (NYSE:NSM), ON Semiconductor Corporation (ONNN), Rohm Co., Ltd. (OTC:ROHCF) , STMicroelectronics N.V. (NYSE:STM) and Texas Instruments Incorporated (TXM). We also compete with fabless analog IC manufacturers, such as Advanced Analogic Technologies Incorporated (NASDAQ:AATI), Diodes, Inc. (NASDAQ:DIOD), Monolithic Power Systems, Inc. and Power Integrations, Inc. (NASDAQ:MPWR) Additionally, we compete with Taiwan-based fabless analog IC companies such as Advanced Analog Technology, Inc., Global Mixed-Mode Technology Inc. and Richtek Technology Corporation.

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