US based semiconductor firm Amkor Technology will acquire Toshiba’s semiconductor assembly operation in Malaysia, according to a memorandum of understanding signed between them.

Amkor will buy Toshiba Electronics Malaysia (TEM) along with a license to the US firm for certain related intellectual property rights.

The Toshiba’s Malaysian assembly primarily produces discrete and analog semiconductors, and its main product has been power semiconductors.

Following the acquisition, TEM is expected to leverage Amkor’s large scale production and material procurement capabilities and boost its power semiconductor operations’ overall efficiency.

Toshiba will reinforce its discrete semiconductor production base Kaga Toshiba Electronics in Japan’s Ishikawa Prefecture, to shift its focus and resources to front-end wafer fabrication for power semiconductors.

Amkor expects the acquisition of TEM will help in growing its semiconductor assembly and testing business, as well as provide a platform for increasing its presence in the power discrete market.

According to both the companies, the transaction is expected to complete by early January 2012.