According to foreign media reports, Global Wafer is the world's third largest semiconductor silicon wafer factory, and Germany's Scroll ranked fourth. This transaction is one of the largest acquisitions in the chip industry in recent years. If the transaction is finally completed smoothly, Global Wafer will jump to the world's second largest silicon wafer manufacturer, which is also the company's largest acquisition deal in history.
Comprehensive information on the global wafer official website, the transaction has been reviewed and approved by China, Germany, Austria, South Korea, Taiwan, Singapore, the United States and Japan's antitrust authorities and the US Foreign Investment Commission.
At present, Global Wafer will actively cooperate with only one relevant competent authority to complete the merger and acquisition review procedures, and is committed to completing the transaction at the beginning of this year.
transaction may increase the concentration of related markets, and it is difficult to have new competitors in the short term
It is understood that the acquirer Global Wafer Co., Ltd. (Global Wafer) was registered and established in Taiwan, China in 2011 and listed on Taiwan Stock Exchange in 2015. The final controller is Sino-US Silicon Crystal Products Co., Ltd. .
was acquired by Fang Shichuang Co., Ltd. (Germany Shichuang), which was registered and established in Germany in 1996 and was listed on the Frankfurt Stock Exchange in 2015. The shares are scattered and there is no final controller. On December 9, 2020, the parties to the transaction signed an agreement. After the centralization is completed, Global Wafers control Germany Schuang separately.
Since Global Wafer and Germany Schuang are both engaged in wafer manufacturing business, there is horizontal overlap between the two parties. After comprehensive judgment, the General Administration defines the relevant commodity markets in this case as 6-inch and below wafers, 8-inch straight-pull wafers, 8-inch zone melt wafers and 12-inch wafers. In addition, the relevant commodities involved in this case are all supplied and purchased globally, and suppliers compete globally, and there are no significant cross-border trade barriers. Therefore, the General Administration determined that the relevant regional markets in this case were global and also examined the situation of the domestic market in China.
According to the analysis of the General Administration, this concentration of operators has or may have the effect of excluding or restricting competition on the global and China's 8-inch zone melting wafer market.
Specifically, after the concentration, the entity ranked first and second in the global and China market share respectively, and its control over the relevant markets has been significantly enhanced. At the same time, Global Wafer and Germany Schuang have more patents and technical know-how in the field of regional melting technology, and will further consolidate their market control after concentration, but it is difficult for other competitors in the market to form effective competitive constraints.
In addition, the market concentration of 8-inch zone melt wafer in the world and China is relatively high. After concentration, the number of major competitors in the global market has decreased from 5 to 4, and the number of major competitors in the Chinese market has decreased from 4 to 3. The transaction has further increased the concentration of the global and 8-inch zone melt wafer market in China.
notice also mentioned that the 8-inch zone melting wafer process is mature and the price is relatively transparent. Customers mainly purchase through bidding. After the transaction is completed, the market concentration has increased significantly. In the case of a decrease in the number of major competitors, the cost of communication and coordination between competitors through explicit or implicit means is reduced. It is also easier for operators to speculate on the pricing strategies of other competitors through the winning results.
At the same time, wafers are at the upstream of the industrial chain, with single product types and rigid demand, with relatively low price elasticity in demand, and large profit margins for coordinated price behaviors, and behaviors that deviate from coordination are more likely to be discovered and restricted. After the deal is completed, the motivation and ability of competitors to coordinate prices is further improved.
In addition, since wafer manufacturing has obvious capital and technology-intensive characteristics, customers have extremely high requirements for product quality and stability. New entrants often face obstacles such as patent licensing and funding at the same time. In addition, the research and development in the wafer manufacturing field is very difficult, and new entrants need a long construction cycle and trial production cycle to ensure the yield rate of the equipment and have been recognized by customers. In the short term, new competitors will not be able to form effective competitive constraints on concentrated entities.
with conditional approval: Global wafers must be stripped of zone melting method wafer business within 6 months
In view of the effect of excluding or restricting competition, the State Administration for Market Regulation decided to approve this concentration by additional restrictive conditions.
restrictive conditions include the regional melting wafer business that dives the global wafer, namely the regional melting wafer business of Denmark Topsil GlobalWafers A/S (Topsil) in the company, including all tangible assets and intangible assets; all agreements, leases, commitments and customer orders; all assets and personnel necessary to maintain the operation of the business and ensure the survival and competitiveness of the business, etc.
According to regulatory requirements, Global wafers must complete the divest within 6 months from the effective date of the review decision. If the maturity cannot be completed, the above-mentioned time limit can be extended by 3 months with the approval of the State Administration for Market Regulation; if the divest cannot be completed within the above-mentioned period, the divest trustee should be entrusted to find a suitable divest buyer and complete the divest in accordance with the "Interim Provisions on the Review of Concentration of Operators".
Not only that, the General Administration requires Global Wafers to continue to supply various wafer products to customers in China in accordance with the principles of fairness, rationality and non-discrimination. Under the same conditions, differential treatment shall not be implemented for customers in China on transaction conditions such as price, quality, quantity, delivery time, after-sales service. After the expiration of the contract, if a customer in China wants to renew the contract, the entity after the centralization shall not refuse without a legitimate reason, and the renewal conditions shall not be lower than the original contract. In addition, Global Wafer must conduct ongoing training of relevant managers and employees, and take necessary measures to ensure the implementation of the commitment plan.
It should be noted that 5 years from the effective date of the above obligation, the entity after the centralization may apply to the General Administration for the lifting of the behavioral conditions. The General Administration will make a decision on whether to terminate the market based on the application and based on the market competition situation; if the termination is not approved by the General Administration, the entity after the concentration shall continue to fulfill the restrictive conditions.
Editor: Nandu reporter Huang Liling
