Flat panel semiconductor company readies major IPO

Techwell Inc, a San Jose, California-based fabless semiconductor designer, is on the verge of releasing an initial public offering (IPO) that could raise $60.5 million to $71.5 million, as increasing numbers of TV viewers around the world trade in their old, fat, TV set for stylish popular flat panel displays.

Techwell manufactures integrated circuits used in a variety of digital media devices including digital video recorders (DVRs), DVD recorders, and LCD computer monitors, CCTV security monitors, as well as in-vehicle DVD displays.

Techwell estimates it has sold more than 15 million semiconductors since 1999 when it first began shipping its integrated circuits. Between 2001 and 2004, the company saw its total annual revenue grow from $2.2 million to $17.3 million, and in 2005 Techwell saw revenues of $36.1 million, with a net income of $4.5 million.

Founded in 1997 by CEO Fumihiro Kozato, Techwell raised $43 million in funding from investors such as Technology Crossover Ventures, Credit Suisse,Panasonic, Sanyo, and private equity firm CID Group.

While the market for digital media semiconductors is huge - industry research firm DisplaySearch projects the market for advanced television sets will grow at a compounded annual rate of 50 percent - the competition is fierce.

Techwell's advantage may be in that they are not just focusing exclusively on the flat panel television market, but also getting into sectors that their competition is not, such as security and automotive.

The stock will trade under the ticker symbol "TWLL" on the Nasdaq. Lehman Brothers will be the lead underwriter, while Cowen & Co., Needham & Co., Piper Jaffray, and Pacific Growth Equities are also underwriters of the offering.