GlobalWafers to Focus on Capacity Expansion After Failed Siltronic Takeover

Article By : Stephen Las Marias

GlobalWafers foresees total capital expenditures of NT$100 billion (about $3.6 billion) from 2022 to 2024, including substantial greenfield investments.

Taiwan-based GlobalWafers Co. Ltd will now focus on capacity expansion after its planned takeover of Siltronic AG failed to reach all completion conditions by the final deadline of January 31, 2022. In particular, the German Government’s approval was the last outstanding completion condition after all other authorities and regulators worldwide cleared the transaction, according to the company.

Because of this, the proceeds originally intended for the acquisition are now earmarked for capital and operating expenses. The company foresees total capital expenditures of NT$100 billion (about $3.6 billion) from 2022 to 2024, including substantial greenfield investments.

GlobalWafers said it made extremely far-reaching remedy proposals and commitments to address the concerns of the German Government and repeatedly offered its willingness to discuss alternative solutions. The long stop date has been reached after a 14-month review process by the German Government. On December 7, 2021, the German Federal Ministry for Economic Affairs and Climate Action extended the assessment period for the issuance of the clearance certificate beyond the long stop date. Therefore, the takeover offer by GlobalWafers and the agreements, which came into existence as a result of the offer, will not be completed and will lapse.

“While the failed completion of our offer for Siltronic is disappointing, we have pursued a dual-track strategy from the very beginning of the tender offer. I am very excited that we can consider now a broad range of options to advance technology development and enhance our capacities,” said Doris Hsu, Chairperson and CEO of GlobalWafers, in a statement.

The company now considers a number of brown- and greenfield capacity expansion plans, including 300mm wafer and epitaxial wafer (EPI), 200mm and 300mm silicon-on-insulator wafers (SOI), 200mm Float-Zone wafers (FZ), silicon carbide (SiC) wafers (including SiC epi), gallium nitride on silicon wafers (GaN on Si), and other large-size next-generation products. The expansion plan includes investments across Asia, Europe, and the United States. The new production lines are expected to ramp up in the second half of 2023 and to be expanded on a quarterly basis.

GlobalWafers directly holds 13.67% of the shares of Siltronic. There are no specific restrictions regarding potential future trading activities for these shares. Meanwhile, the approximately 56.60% of the outstanding shares of Siltronic tendered into the all-cash tender offer during the acceptance period will be re-booked to their original owners without undue delay.

The business combination agreement between GlobalWafers and Siltronic foresees that GlobalWafers shall pay a termination fee of €50 million to Siltronic in the event of failure to obtain required regulatory approvals. According to the company, the impact is limited because of its solid financial standing.

 

Stephen Las Marias is the editor of EETimes Asia. You may reach him at stephen.lasmarias@aspencore.com.

 

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