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GlobalWafers, Taiwan’s largest manufacturer of 3-inch to 12-inch silicon wafers, and also the world’s 3rd largest silicon wafer maker with a market share of 15.2%, is getting closer at acquiring Siltronic AG, the world’s 4th largest wafer manufacturer with a global market share around 11.5%. In a deal that can be worth up to 3.75 billion euros, the Taiwanese manufacturer announced its intention to acquire the German company in 2020. 

Earlier this week, the deal has just been approved by U.S. antitrust authorities, following approvals from Singapore, Taiwan, South Korea, Austria and Germany. If China approved the deal, the acquisition process would be successfully completed by the end of 2021, making GlobalWafers the world’s second largest wafer manufacturer with a market share of 26.7%, surpassing its Japanese rival SUMCO Corp., and coming up behind Japan’s Shin-Etsu Chemical, currently the market leader with a 33% market share. 

Thwarting Chinese ambition? 

The last mile won’t come without hurdles, however. In July 2021, it was rumored that the deal was facing challenges from Chinese antitrust authorities, a claim that GlobalWafers denied. Nevertheless, competition from China’s growing semiconductor industry partially motivated GlobalWafers’s acquisition proposal. Ming Kuang Lu, founder and director of GlobalWafers, made it clear that his company acquired Siltronic to prevent it from “falling into Chinese hands”, damaging GlobalWafers in the process. The industry veteran further claimed that his acquisition deal would delay China’s silicon wafer industry from catching up by ten years. 

In fact, an insider revealed that a Chinese company, backed by the country’s gigantic semiconductor policy fund, the IC Industry Investment Fund, twice offered to purchase Siltronic. According to Lu, China is in dire need of 12-inch silicon wafers. 

East Asia dominates 12-inch wafer capacity 

Indeed, when it comes to global 12-inch wafer capacity, it has been dominated by Taiwan and South Korea, respectively at 23% and 24%. As a matter of fact,  77% of global 12-inch wafer capacity has been concentrated in East Asia, according to SEMI. While China accounts for 15% of the global capacity, it is mainly attributed to the TSMC, Samsung and SK Hynix production facilities located in China. Excluding them, China’s share of global 12-inch wafer capacity is estimated to be below 6%. 

As a result, expanding its 12-inch wafer capacity has been key to Chinese semiconductor policy, a process only hastened by the ongoing chip shortage crisis. SEMI estimates that the share of domestic companies in China’s 12-inch wafer capacity will rise to 60% in 2024, from the 43% share in 2020. 



References: CommonWealth, Digitimes, UDN, SEMI