Global politics sinks $5.3bn wafer deal

Business news |
By Nick Flaherty

German regulators have declined to approve a deal for a Taiwanese company to acquire a local wafer manufacturer in a $5.3bn deal.

GlobalWafers started the acquisition of Munich-based Siltronic in December 2020 and had received approval from US and Chinese regulatory authorities. However the supply of wafers has since been identified as a key element of the supply chain and the European Union has been looking at its sovereign capability in this area.

Wafer supply is expected to be a key part of the European CHIPS Act legislation due next week, and Siltronics would be an important part of the supply chain with a 300mm plant in Freiberg in Saxony, as well as 200mm and 300mm plants in Singapore. It also has a facility in the US, making it a chip in the US supply chain capability.

GlobalWafers is one of the five largest silicon wafer manufacturers in the world and 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.

“We have not been able to obtain the approval from the German Government before the long stop date. Based on our efforts to reach a mutually acceptable solution as well as our long and successful history in Europe this outcome is very disappointing,” said Doris Hsu, Chairperson and CEO of GlobalWafers. “We will certainly continue to work closely with our European customers, many of which supported the proposed transaction. We will analyze the non-decision of the German Government and consider its impact on our future investment strategy.”

GlobalWafers directly holds 13.67 percent of the shares of Siltronic, and will pay €50m to Siltronic to terminate the deal.

The company says the unsuccessful transaction will not impact GlobalWafers’ operations and Europe remains an important market for GlobalWafers and it remains committed to the customers and employees in the region, it said. It is now looking at how it will use the funds instead.;

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