GlobalWafers Co., a Taiwan-based semiconductor wafer producer, recently announced its plan to acquire German silicon wafer producer Siltronic AG in a deal worth €4.35b. This acquisition will make GlobalWafers the third-largest silicon wafer supplier in the world and strengthen its presence in Europe.
Background on GlobalWafers and Siltronic
GlobalWafers Co., Ltd., formerly known as SunEdison Semiconductor Limited, is one of the top three independent semiconductor wafer suppliers in the world. The company has grown exponentially since its inception in 1998 to become a leading provider of wafer foundry services with five manufacturing sites located around the world.
Siltronic AG is one of the largest manufacturers of silicon wafers based in Germany. Founded in 1967, the company has been providing high-quality wafers for integrated circuits used in electronic applications such as smartphones, computers, and automotive systems for decades. It currently operates four factories across Europe and Asia and serves customers from various industries all over the world.
Purpose of Acquisition
This acquisition is part of GlobalWafers’ global strategy to expand its presence outside Taiwan where they are headquartered and gain access to new markets and technologies.
By acquiring Siltronic, GlobalWafers will be able to increase their capacity and production capabilities while also expanding into new markets like automotive, medical, aerospace, and industrial sectors that are served by Siltronic’s products.
In addition, this acquisition will help GlobalWafers further enhance its research and development capabilities by taking advantage of Siltronic’s technology expertise as well as its extensive customer base in Europe.
Benefits of Acquisition
This acquisition is expected to bring several benefits to both companies involved:
- Increased Capacity: With this merger, GlobalWafers will have access to six large factories worldwide providing enough capacity for them to increase production levels significantly.
- New Markets: The combined entity will be able to serve more customers across various industries including automotive, medical electronics, aerospace & defense applications.
- Increased Research Capabilities: With the combination of two R&D teams from each company under one roof, there will be more resources available for innovation development.
- Cost Savings: The combined entity can enjoy benefits from economies of scale thus reducing costs associated with production processes.
- Greater Financial Strength: Accessing larger financial resources from investors should give both companies greater flexibility when it comes to investing or making strategic decisions for future growth.
- Improved Brand Recognition: Combining two well-known industry players should help bring increased visibility within the semiconductor industry as well as enable further strategic partnerships down the road.
- Recruiting Advantages: The merged companies can take advantage of both organizations’ talent pools enabling them to quickly find qualified personnel needed for different roles within their organization.
Conclusion
The agreement between Taiwanese semiconductor maker GlobalWafers Co., Ltd., formerly known as SunEdison Semiconductor Limited, and German silicon wafer producer Siltronic AG marks yet another milestone for both companies involved in this transaction.
Through this acquisition, Global Wafer gains access not only to increased production capacity but also to new markets which provide multiple benefits such as cost savings, improved brand recognition, financial flexibility, etc.
It remains unclear how long it takes until we witness tangible results from this transaction but nonetheless it showcases an interesting deal between two successful players within the semiconductor industry.
