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Sumco acquires majority stake of Komatsu

Posted: 19 Jun 2006 ?? ?Print Version ?Bookmark and Share

Keywords:controlling stake? Sumitomo Mitsubishi Silicon? Sumco? Komatsu Electronic Metals? silicon wafer maker?

Sumitomo Mitsubishi Silicon Corp. (Sumco) Wednesday (June 14) said that it would take a 51 percent controlling stake in rival Japanese silicon wafer maker Komatsu Electronic Metals Co. for $322 million.

The move, which was positioned as an acquisition, will propel Sumco's market share in the silicon wafer business from 21 percent to 31 percent, according to a report from Reuters. That would be "on par" with Shin-Etsu Handotai Co. Ltd, the world's largest silicon wafer maker, according to Reuters.

Under the terms of the deal, Sumco, the world's second largest silicon wafer maker, will buy each Komatsu Electronic share from its parent company, Komatsu Ltd, for $20.95.

The move will give Sumco a controlling interest in Komatsu Electronic, which will become a "member" of the Sumco group. The new Sumco group will consist of "two pure-play silicon [wafer] producers," according to the companies.

Besides boosting its share in the silicon wafer arena, Sumco's move also underscores the consolidation in the competitive sector. Sumitomo Metal Industries Ltd. and Mitsubishi Materials Corp. consolidated in 2002 their wafer operations into what they hope will become the world's largest wafer supplier.

The resulting company was called Sumco. Last year, Sumco launched an initial public offering.

The company recently said it plans to build a new 300mm silicon wafer plant in an effort to meet soaring product demand, according to a report. The total investment for the plant is $879.1 million.

One of the second-tier players in silicon wafers, Komatsu Electronic has wafer plants in Miyazaki and Nagasaki. The company has a joint venture in Taiwan, dubbed Formosa Komatsu Silicon Corp. The company's partner in the venture is Taiwan conglomerate Formosa Plastics Group.

- Mark LaPedus
EE Times

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