NVIDIA BVI Holdings Limited filed a merger report with the Fair Trade Commission for the merger plan with ULI Electronics Inc.

Chinese Taipei

Case:

Key Words:

Competition restraints, chips

Reference:

Fair Trade Commission Decision of February 9, 2006 (the 744th Commissioners’ Meeting)

Industry:

Semi-conductors Manufacturing (2710)

Relevant Laws:

Article 6 , Article 11 and Article 12 of the Fair Trade Law

Summary:

1. NVIDIA Corporation made an arrangement for its subsidiary company NVIDIA BVI Holdings Limited (hereinafter referred to as NVIDIA BVI) to merge with ULI Electronics Inc. (hereinafter referred to as ULI Electronics). NVIDIA BVI will be the surviving company after the merger. The merger was filed with the Fair Trade Commission (FTC) according to the provisions of the Fair Trade Law.
2. Upon investigation, the FTC found that the filed merger has met the situation “where an enterprise and another enterprise are merged into one” as defined in Article 6, Paragraph 1, Subparagraph 1 of the Fair Trade Law. Furthermore, the sales of NVIDIA Corporation and ULI Electronics for the preceding fiscal year had exceeded the sales announced by the FTC and thus met the threshold of merger filing stipulated in Article 11, Paragraph 1, Subparagraph 3 of the Fair Trade Law. Therefore, such act of merger shall be filed with the FTC. In addition, according to the provision of Article 7, Paragraph 1, Subparagraph 1 of the Enforcement Rules to the Fair Trade Law, both NVIDIA Corporation and ULI Electronics, the enterprises of this merger shall file the report of merger. The FTC thus accepted this merger filing for further examination.
3. This merger will not constitute any entry barriers because laws and restrictions, patents or other intellectual properties do not exist in the relevant market; moreover, there are many competitors in the domestic market of IC design. The other IC designers do not need huge amount of capital to enter product market related to this merger. The enterprises participating in the merger are unable to exclude the other enterprises from entering the market. Additionally, the market shares of the enterprises do not change significantly after the merger. The major business of NVIDIA Corporation is research and development of intermediate and high level graphic chips. The major business of ULI electronics is research and development of core logic chipset and its related parts. The products manufactured by the enterprises participating in the merger are practically not identical and applied in different areas. Furthermore, the market entry and exit barriers of chipset design are very low. Therefore, the aforementioned merger will slightly affect the chipset design market. Although NVIDIA Corporation has high market share in graphic processor market in 2004, but ULI Electronics did not sell the product at issue, hence this merger will not affect the graphic processor market. Therefore, there is still no obvious evidence of disadvantages resulted from competition restraints in this merger. After merging, the overall economic benefit of this merger outweighs the disadvantages resulted from competition restraint. Therefore, in accordance with the provision of Article 12 of the Fair Trade Law, this merger is not prohibited.

Summarized by Chen, Haw-Kae;
Supervised by Liou, Chi-Jung

Appendix:
NVIDIA BVI Holdings Limited
Uniform Invoice Number: Not Applicable
Uli Electronics Inc.’s Uniform Invoice Number: 80145909