Another Semiconductor M&A... Taiwan GlobalWafers Pursues $4.5 Billion Acquisition of German Siltronic

Consecutive Mergers and Acquisitions
Global Semiconductor M&A Expected to Surpass $122 Billion... Likely to Be the Largest Ever

[Image source=GlobalWafers website]

[Asia Economy Reporter Hyunwoo Lee] Taiwan-based semiconductor wafer manufacturer GlobalWafers is set to acquire its German peer Siltronic for $4.5 billion (approximately 4.9725 trillion KRW), marking the realization of another mega big deal. Once the merger and acquisition (M&A) is completed, this year’s semiconductor M&A activity is expected to reach an all-time high. In particular, Chinese semiconductor companies are also expected to actively join the M&A wave, suggesting that the M&A momentum will continue into next year.

According to Bloomberg on the 29th (local time), German Siltronic announced in a statement that its largest shareholder, Wacker Chemie, which holds 30.8% of the company’s shares, is currently negotiating to sell all its Siltronic shares to GlobalWafers. GlobalWafers offered a purchase price of 125 euros per share (approximately 165,000 KRW), bringing the total acquisition value to $4.5 billion. Bloomberg reported that the offered price includes a 10% premium over Siltronic’s closing price on the 27th. Both parties are expected to finalize additional negotiations and obtain board approval, with an official announcement of the acquisition deal anticipated in the second week of next month.

If this negotiation is completed, semiconductor market M&A this year will set a record high. Despite demand contraction caused by the COVID-19 pandemic and worsening conditions in downstream industries, semiconductor acquisition deals have continued this year. In July, U.S. semiconductor company ADI announced its acquisition of Maxim Integrated for $20 billion, followed by Nvidia’s $40 billion ARM acquisition plan in September. Last month, SK Hynix purchased Intel’s NAND flash business unit for $9 billion. Bloomberg reported that this year’s semiconductor industry M&A deals are expected to surpass the previous record of $122 billion set in 2016.

GlobalWafers is one of the world’s top three semiconductor wafer manufacturers, with 26 subsidiaries across 14 countries. As of last year, it holds an 18% share of the global market. Wacker Chemie, Siltronic’s largest shareholder, is Germany’s largest silicon processing company, operating 24 production plants and 50 subsidiaries worldwide. Siltronic holds about 10% of the semiconductor wafer production market, and Wacker Chemie announced in 2016 that it would begin restructuring and selling Siltronic to focus on its silicon business division.

The merger of the two companies is expected to further increase GlobalWafers’ market share. Last year, GlobalWafers recorded sales of 58 billion TWD (approximately $2 billion) and operating profit of 18 billion TWD, while Siltronic posted sales of 1.3 billion euros and operating profit of 300 million euros. The international wafer market has long been dominated by Japanese companies such as Shin-Etsu and Sumco, which hold over 55% of the market. GlobalWafers is expected to pursue further M&A activities to break Japan’s monopoly and increase its global market share.

Semiconductor market M&A is expected to be even more active next year. This is because M&A activity among semiconductor companies in China is projected to increase significantly. According to local media including China’s Xinlang Technology, on the 28th, Wang Zhijun, Vice Minister of China’s Ministry of Industry and Information Technology, stated in a keynote speech at the China Development Planning Forum, “Currently, there has been blind investment in semiconductor manufacturing and related fields,” adding, “Emerging industries such as the semiconductor sector require large companies with leading competitiveness, and to address this, strategic development through M&A is recommended.” According to Chinese economic media Caixin, as of the end of last year, over 50 large semiconductor projects are underway across China, with government funding of 1.7 trillion yuan (approximately 290 trillion KRW) invested.

This content was produced with the assistance of AI translation services.