, Columnist
A $4.5 Billion Chip Deal Shows Dark Side of the Boom
GlobalWafers is paying 100 times last year’s free cash flow for a slowing business in an underperforming sector.
Not all semiconductor suppliers are created equal.
Photographer: JASON JANIK/Bloomberg
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A decision by Taiwan’s GlobalWafers Co. to buy its German rival Siltronic AG marks an expensive bet on consolidation that exposes the stark reality of their slice of the semiconductor market. For the seller, it’s the best deal they could have hoped for.
GlobalWafers agreed to a tender bid that values the target at 3.75 billion euros ($4.5 billion). Unsurprisingly, Siltronic’s major shareholder Wacker Chemie AG is delighted and has agreed to sell its 31% stake. It knows it won’t get a better offer.