Pixelworks CEO Publishes Letter to Shareholders

Core Viewpoint - Pixelworks, Inc. is proposing the sale of its majority-owned subsidiary, Pixelworks Semiconductor Technology (Shanghai) Co., Ltd., to VeriSilicon for an equity value of approximately USD 133 million, aiming to focus on its core technology licensing business and enhance shareholder value [2][3][6]. Group 1: Transaction Details - The sale of Pixelworks Shanghai is based on an equity value of RMB 950 million (approximately USD 133 million) [2]. - After transaction costs and taxes, the expected net cash proceeds for Pixelworks are estimated to be between USD 50 million and USD 60 million [3]. - The transaction requires the approval of shareholders owning at least two-thirds (67%) of the outstanding common stock [3][5]. Group 2: Strategic Rationale - The transaction is expected to unlock value for shareholders by monetizing a significant asset in the current environment [6]. - Post-transaction, Pixelworks will focus on its global technology licensing business, specializing in cinematic visualization solutions, which is seen as a more scalable and less capital-intensive model [4][6]. - The net cash proceeds will improve the company's financial flexibility, allowing for better investment in growth opportunities and higher-return projects [6]. Group 3: Future Outlook - The company aims to transform into a pure play technology licensing company, leveraging its flagship TrueCut Motion™ platform to enhance cinematic experiences [3][4]. - With over two decades of image-processing innovation, Pixelworks intends to continue delivering high-fidelity viewing experiences across various screens [4].