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The sell-off of German tech companies continues: Munich’s chip supplier Siltronic is said to go to a Taiwanese rival for billions of euros, if politicians don’t use their veto.
German supplier to the chip industry Siltronic represents a $ 1 billion acquisition by Taiwanese competitor GlobalWafers. If the deal goes through, one of the biggest semiconductor companies will emerge. Both companies would bring it closer to a turnover close to three billion euros. The somewhat larger contribution would come from GlobalWafers. Last year, Siltronic had sales of 1.3 billion euros.
Latest generation silicon technology
Until now, the world market for so-called wafers has been dominated by five companies: they have managed to manufacture 300-millimeter wafers, that is, 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, GlobalWafers and Siltronic would jointly surpass number two, Sumco.
For comparison: chipmaker Infineon had a total of € 8.5 billion in sales across all corporate segments in the last fiscal year.
Siltronic boss complains about high electricity costs
Siltronic should essentially be able to continue with its own business strategy. Furthermore, location closures or operational layoffs in Germany are excluded until the end of 2024.
However, Siltronic boss Christoph von Plotho had repeatedly criticized the high costs of electricity in Germany in the past. Manufacturing semiconductor wafers, which customers use to make computer chips, for example, is energy intensive.
According to Siltronic’s management, the acquisition negotiations are nearing completion. GlobalWafers offers 125 euros per share. At this price, Siltronic is valued at 3,750 million euros.
What is the federal government doing?
However, the sale is not agreed in any way. A stockbroker warned that the federal government could still oppose the deal. Based on a market observer’s assessment, the federal government could evaluate this as another sell-off of key technology and try to prevent it.
Fast-moving digitization makes the whole industry attractive. Semiconductors are now used in all kinds of products, from kitchen appliances to mobile communications and the automotive industry.
Memory and control chips are increasingly being installed in automobiles, for example for driver assistance systems. The business of semiconductors and the technology required to make chips is therefore extremely cyclical. When the economy grows, so does the chip business.
Investors are delighted
Siltronic’s main shareholder, Wacker Chemie, considers the terms “attractive and appropriate.” The Munich-based company would receive just under 1.2 billion euros for its ex-daughter’s remaining shares, which had been listed on the stock exchange in 2015 and in which they currently own 31 percent. Siltronic has around 3,800 employees around the world and production facilities in Asia, Europe and the United States. The company’s headquarters are in Munich.
The billion dollar offer is well received in the stock market. Siltronic’s shares in MDax rose about 10 percent to just under € 125, while Wacker Chemie’s shares were up more than three percent.
Those: boerse.ard.de
