Siliconware Precision Industries (SPIL) expects its strategic partnership with Foxconn Electronics for developing SiP (system-in-package) packaging technology to begin bearing fruit within one year, according to company chairman Bough Lin.

SPIL recently announced plans to form a strategic alliance with Foxconn, which will become the largest shareholder of the IC backend firm through share swaps.

Lin also urged shareholders of SPIL not to sell their holdings to Advanced Semiconductor Engineering (ASE), which has disclosed plans to buy SPIL's shares through the open market.

With a major stake in SPIL, ASE could intervene with the company's operations, Lin noted. In addition, ASE's investment in SPIL is unlikely to create a synergy as many customers from both sides are overlapped, Lin said.

ASE is seeking to acquire an up to 25% stake in SPIL that will make the company the largest shareholder of SPIL.

Antitrust concerns are another reason behind SPIL's resistance to the ASE bid, Lin indicated. Lin also believes that once ASE holds a major stake in SPIL, company directions would be steered towards giving priority to the interests of ASE.

In response, ASE has reiterated its plan to buy up to 25% of SPIL is purely a financial investment and that the acquisition aims to integrate Taiwan's IC packaging and testing industry.

SPIL's move to bring Foxconn closer to itself could be eyeing SiP orders from Apple, market observers have commented. ASE has been reportedly in the supply chain of Apple with its SiP services.