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reMunich’s chip supplier Siltronic is about to be sold to Taiwan. Siltronic announced late Sunday that it is about to strike a deal with rival GlobalWafers, which wants to offer € 3.75 billion for the M-Dax listed company.
GlobalWafers is offering 125 euros per share, eleven percent more than Friday’s closing price. Siltronic’s Board of Directors considers the purchase price to be “attractive and reasonable”. Taiwanese almost certainly own 30.8 percent of Siltronic. The main shareholder Wacker Chemie is about to reach an agreement with GlobalWafers to offer its block of shares at the offered price. The board of directors of the Munich-based family business also considers the offer adequate.
Consolidation in the global wafer market will accelerate with the acquisition. Five companies can produce 300-millimeter wafers, the most modern silicon wafers from which microchips are drilled. So far, the market leader is Japan’s Shin-Etsu with 30 percent. GlobalWafers is in third place with 17 percent, Siltronic in fourth place with 13 percent. With the acquisition, they would at least surpass number two, Sumco.
The momentum of digitization is helping the industry
In 2019, GlobalWafers had sales of two billion dollars, while Siltronic reached 1.3 billion euros. In the first nine months of 2020, Siltronic’s sales fell 4.5 percent to € 923 million, while operating income (Ebitda) fell 17 percent.
The negotiations had dragged on for months, Siltronic explained. A binding merger agreement must be signed in the second week of December, as soon as the supervisory boards have given their approval. Siltronic’s share price has risen sharply since the talks began. Only in November it rose approximately by half and on Friday the share closed at 113.55 euros.
The crown crisis initially shook the chip industry, but now some companies have even been shown to benefit from the pandemic, which prompted a surge in digitization. Siltronic shareholders will receive a dividend of two (2019: three) euros per share prior to the acquisition.
According to the Munich-based company, the Taiwanese company does not want to change strategy at Siltronic. The Burghausen plants in Bavaria and Freiberg in Saxony are insured until the end of 2024. Until then, redundancies for operational reasons are also excluded. The company employs about 3,700 people, almost two-thirds of them in Germany.
Wacker Chemie took its Siltronic subsidiary public in 2015 because the group did not want to participate in the ups and downs of the semiconductor industry. In 2017, Wacker resigned from the majority and gradually reduced participation. Therefore, it was clear that the family business would also separate from the rest of the shares in the medium and long term. GlobalWafers also emerged from a spin-off. Sino-American Silicon Products listed the subsidiary on the Taipei Stock Exchange in 2015, but it remains the majority owner with 51 percent.
