GlobalWafers Co. says greater market share can be achieved in the silicon-wafer market after the Taiwanese supplier to chipmakers agreed to buy SunEdison Semiconductor Ltd. (Nasdaq: SEMI) for $683 million including debt, adding new customers and production facilities.
The two companies currently have a combined 17 percent market share -- making it the world’s third largest silicon-wafer maker -- and 20 percent is within reach, chairwoman and chief executive officer Doris Hsu said in an interview on Thursday. She expects the industry to grow 4 to 6 percent in 2017.
Other recent similar deals include Analog Devices Inc.’s (Nasdaq: ADI) agreeing to acquire Linear Technology Corp. (Nasdaq: LLTC); FormFactor Inc. (Nasdaq: FORM) is buying competitor Cascade Microtech Inc.; and Mellanox Technologies (Nasdaq: MLNX) is adding EZchip (Nasdaq: EZCH).
The deal for St. Peters, Missouri-based SunEdison Semiconductor will add clients and capacity, and give GlobalWafers greater access to South Korea and the European Union for silicon wafers used by chipmakers. The Taiwanese company already counts Samsung Electronics Co., Taiwan Semiconductor Manufacturing Co. and Toshiba Corp. among its customers, according to data compiled by Bloomberg.
SunEdison Semiconductor investors will get $12 a share cash according to a statement from the companies. The deal has the backing of both boards and will be financed through existing cash and bank financing.
“The price is more than acceptable,” Hsu said, adding that the combination offers minimal overlap in customers, products and production capacities. SunEdison also has silicon-on-insulator technology and epitaxial wafer capability, in demand in China’s new 12-inch wafer facilities. Hsu said the merged company could become China’s largest supplier to such wafer makers “in the medium term.”
GlobalWafer’s sales are expected to grow every month for the rest of year, the CEO said in the interview. One risk for orders from Japan is if the Japanese yen rises to 80 or 90 per U.S. dollar, she said.