IDG Capital has emerged as the leading bidder for the electronics assembly equipment business of Hong Kong-listed ASMPT, in a potential transaction that could value the unit at more than $1 billion as demand for artificial intelligence infrastructure boosts the semiconductor manufacturing supply chain.
Three people familiar with the matter told Reuters that IDG Capital had advanced further than other interested parties in negotiations to acquire ASMPT’s surface mount technology (SMT) business. A deal could be reached in the coming weeks, although the terms remain unsettled and there is no certainty that an agreement will be completed.
ASMPT is seeking a valuation of $1.5 billion for the business, according to two sources, but prospective buyers may be unwilling to meet that expectation.
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Private equity firms FountainVest Partners and Triton Partners have also expressed interest and held discussions about the unit, the sources said. They requested anonymity because the information was confidential.
The potential sale comes as the SMT business benefits from rising demand for equipment used in manufacturing AI servers and other advanced electronic products. Its recent financial performance could strengthen ASMPT’s negotiating position, although the gap between the seller’s valuation target and buyers’ offers may determine whether the process concludes successfully.
ASMPT’s SMT unit supplies machines, software and services that help electronics manufacturers print solder paste, inspect components and place them onto circuit boards. Its main end markets include AI servers, optical transceivers and electric vehicles, according to the company’s website.
The business has become more relevant as technology companies expand data-center infrastructure to support AI workloads. AI servers require complex electronic assemblies, while optical transceivers are essential for transmitting data across the high-speed networks connecting computing systems.
This demand is translating into stronger orders for equipment used in electronics manufacturing, providing a potential growth opportunity for suppliers such as ASMPT.
The company reported that SMT revenue rose 53.1% year-on-year to HK$3.87 billion ($493.5 million) in the first half of 2026. Bookings increased 87.8% to HK$6.98 billion, a record for the period, driven largely by demand from AI server manufacturers.
The sharp increase in bookings is notable because it indicates that customers are placing orders for future equipment deliveries, rather than the company’s performance being driven solely by revenue already recognized. However, bookings do not automatically translate into revenue or cash flow on the same schedule, and their eventual contribution is expected to come from delivery timelines, cancellations and the company’s ability to fulfil orders.
ASMPT’s broader financial performance has also improved. Adjusted net profit from continuing operations more than tripled to HK$972.7 million in the first half of 2026, while total revenue rose 42.5% to HK$8.9 billion.
The company forecast third-quarter revenue of between $630 million and $690 million.
These results provide a stronger financial backdrop for the divestment process. A business with rising sales and a record order pipeline may attract buyers seeking exposure to AI-related manufacturing investment, although private equity investors will also assess how sustainable that growth is and how much capital the business requires to expand.
ASMPT Seeks $1.5 Billion Valuation
ASMPT announced in January that it was conducting a strategic assessment of its SMT Solutions business. The review considered several options, including an outright sale, a joint venture, a spin-off, a public listing or retaining and supporting the unit.
The company said the process could help the SMT business achieve long-term growth while allowing ASMPT to focus more closely on its semiconductor solutions business and chip packaging operations.
Semiconductor packaging and electronics assembly equipment serve different stages of the technology manufacturing chain. By separating the SMT business, ASMPT could potentially redirect management attention and capital towards its semiconductor-related operations while giving the assembly equipment unit a different ownership structure.
A private equity buyer could seek to expand the business, improve operating efficiency, or pursue acquisitions before eventually selling its stake or listing the company. Such outcomes are possible investment strategies, not confirmed plans for the SMT unit.
However, some analysts have warned that the reported valuation expectations could complicate negotiations. This is because ASMPT’s $1.5 billion target is above the more general valuation of over $1 billion cited for a potential deal, suggesting that the parties may still need to bridge a substantial gap.
The business’s recent growth and exposure to AI-related demand may support the seller’s expectations. Buyers, however, must consider whether current orders represent a durable expansion cycle or a period of unusually strong investment that could moderate as customers complete infrastructure projects.
The valuation will also depend on profitability, capital expenditure requirements, customer concentration, and the competitive position of the unit. Strong bookings are encouraging, but buyers generally need to establish how much of that demand can be converted into sustainable earnings.
For private equity firms, the challenge is to avoid paying a price that assumes the strongest recent growth rates will continue indefinitely. If demand slows or customers delay equipment purchases, a high entry valuation could reduce the potential return on an acquisition.
ASMPT shares have risen 52% year-to-date, giving the company a market capitalization of approximately $6.5 billion, according to LSEG data.
The rally reflects growing investor interest in companies supplying equipment and components needed to expand AI computing infrastructure. However, the potential sale of the SMT unit raises a separate question about how ASMPT’s remaining businesses would be valued and how proceeds from a transaction might be used.
A successful divestment could give ASMPT greater flexibility to invest in semiconductor solutions and chip packaging, consistent with the rationale it outlined when announcing the review. The effect on shareholder value is expected to emanate from the sale price, transaction costs and the use of proceeds.
ASMPT has also attracted acquisition interest in the past. In 2024, several private equity firms discussed a possible take-private transaction involving the entire company. Those talks did not produce a deal, ASM International said in November 2024. The Dutch chip equipment maker holds a 25% stake in ASMPT.
The current process differs because it concerns the SMT business rather than ASMPT as a whole. A sale could therefore allow the company to restructure its portfolio without transferring ownership of its remaining semiconductor operations.