Commentary: Silicon wafer industry headed for consolida…

With Siltronic reportedly drawing interest from China’s state-backed industry group, the global silicon wafer industry is expected to go through a period of consolidation in 2017.

China has become a vital market for chipmakers’ future growth ambitions, while local governments in the region are pushing for self-sufficiency in semiconductors. More buyers from China are expected to emerge in 2017 pursuing acquisitions in the chipmaking sector including the semiconductor-grade silicon wafer segment.

The global silicon wafer market continues to be led by Japan-based Shin-Etsu Chemical and Sumco. However, China’s aggressive pursuit of semiconductor manufacturing capability is expected to bring a major change to the industry landscape in 2017, when there will be M&A activity with specific offers from China-based firms.

Nevertheless, M&A deals offered by China’s state-backed groups could face more difficulties in obtaining approval from Europe and the US governments, which are more aware of more of their local businesses acquired by China-based companies.

Recently, rumors have circulated about Siltronic being eyed by China’s state-backed National Silicon Industry Group for a possible acquisition of a majority stake in the German company. Siltronic is currently the world’s third-largest silicon wafer maker, with its customers mainly the leading chipmakers including Globalfoundries Intel, Micron Technology, NXP, Samsung, SK Hynix, STMicroelectronics, TI, Toshiba and TSMC.

Previously, rumors circulated in China’s semiconductor industry that Richard Chang, former CEO of China-based pure-play foundry Semiconductor Manufacturing International (SMIC), has set up a new company in Shanghai for producing 12-inch blank silicon wafers. The formation of the new China-based silicon wafer maker is being backed financially by the Shanghai city government.

Earlier in 2016, Finland’s Okmetic confirmed it had received a takeover offer from China’s National Silicon Industry Group (NSIG). Okmetic makes silicon wafers used in semiconductors and ICs. NSIG is owned by five shareholders – National Integrated Circuit Industry Investment Fund, Shanghai Guosheng (Group) Limited, Shanghai SummitView Integrated Circuit Equity Investment Partnership, Shanghai SIMIC and Shanghai Jiading Industrial Development Zone (Group).

Shanghai-based NSIG is also reportedly in talks to acquire a 14.5% stake in Soitec, a France-based company specializing in developing and making semiconductor materials.

In 2016, one M&A deal has taken place in the silicon wafer industry, with GlobalWafers’ acquisition of SunEdison Semiconductor, previously the world’s fourth-largest silicon wafer supplier. Acquiring SunEdison would allow GlobalWafers to boost its annual production capacity to 750,000 12-inch wafers, one million 8-inch wafers and 830,000 6-inch wafers, and hike its global market share to 17%, according to GlobalWafers.

Categories: Bits + chips IC manufacturing

Tags: 12-inch wafer China government Commentary GlobalWafers government incentive Shanghai Shin-Etsu Handotai silicon silicon wafer Siltronic Sumco wafer

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• China to produce 3D NAND chips as early as end-2017 (Oct 18)
• Digitimes Research: China IC self-sufficiency rate to reach 40% by 2020 (Aug 23)
• Former SMIC CEO to set up 12-inch wafer plant in Shanghai (Mar 24)

Related news from other sites

• Siltronic said to attract takeover interest from China group (Dec 2) – Bloomberg
• China moves in takeover of European wafer supplier (May 31) – EE Times