Taiwan Tech Focused Senior Analyst

Patrick Liao

Equity Bottom-Up

<ul>
<li>Its revenue, GM and NM were NT$16.3bn, 42.6% and 36.1% in 1Q22. </li>
<li>GlobalWafer experienced their China Suzhou subsidiary, SST, suspended production during April 2~27 by local government's COVID-19 control measure, but it had resumed production.</li>
<li>The stock dividend is NT$16 in 2022, which is 58.7% payout ratio from 2021 earnings. The payment date is to be 2022/08/05.</li>
</ul>


Its revenue, GM and NM were NT$16.3bn, 42.6% and 36.1% in 1Q22. 
GlobalWafer experienced their China Suzhou subsidiary, SST, suspended production during April 2~27 by local government's COVID-19 control measure, but it had resumed production.
The stock dividend is NT$16 in 2022, which is 58.7% payout ratio from 2021 earnings. The payment date is to be 2022/08/05.


GlobalWafers (6488.TT): Not Settling Disturbing Reasons, but We Presume Stock Price Could Rebound.

<ul>
<li>Under current Ukraine crisis, we have to admit the volatility is very high. Not only the GlobalWafers, but the other semiconductor names are stumbled as well.</li>
<li>Although 4Q21 revenue is NT$15.8bn, the highest record in GlobalWafers’ history, but the termination fee on Siltronic deal was €15mn, which was consuming NT$3.5 for GlobalWafers’ net EPS.</li>
<li>GlobalWafers keeps NT$100bn, ~US$3.6bn, for the expansion in next couple of years, which covers investments across Asia, Europe and the United States spanning both brownfield and greenfield projects.</li>
</ul>


Under current Ukraine crisis, we have to admit the volatility is very high. Not only the GlobalWafers, but the other semiconductor names are stumbled as well.
Although 4Q21 revenue is NT$15.8bn, the highest record in GlobalWafers’ history, but the termination fee on Siltronic deal was €15mn, which was consuming NT$3.5 for GlobalWafers’ net EPS.
GlobalWafers keeps NT$100bn, ~US$3.6bn, for the expansion in next couple of years, which covers investments across Asia, Europe and the United States spanning both brownfield and greenfield projects.


GlobalWafers (6488.TT): Under Current Ukraine Crisis, We Have to Admit the Volatility Is Very High.

European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>On 1 February, Siltronic announced that the public tender offer by GlobalWafers will not be completed as offer conditions have not been fulfilled within the applicable deadline.</li>
<li>Germany's Economy Ministry could not complete all the necessary review steps. The deal rationale was compelling. Wacker Chemie still intends to sell its remaining 30.83%. GlobalWafers may bid again.</li>
<li>As the industry deals with overcapacity, Siltronic could be worth more as a standalone business. Longer term, TP is €162.64/share (comparables based), 12% above Siltronic's offer</li>
</ul>


On 1 February, Siltronic announced that the public tender offer by GlobalWafers will not be completed as offer conditions have not been fulfilled within the applicable deadline.
Germany's Economy Ministry could not complete all the necessary review steps. The deal rationale was compelling. Wacker Chemie still intends to sell its remaining 30.83%. GlobalWafers may bid again.
As the industry deals with overcapacity, Siltronic could be worth more as a standalone business. Longer term, TP is €162.64/share (comparables based), 12% above Siltronic's offer


Globalwafers/​Siltronic: There Is Still Value in Siltronic

<ul>
<li>The GlobalWafers announced the deal to merge Siltronic did not get the approval by Germany government this morning. <strong>We maintain our Target Price for GlobalWafers doesn’t change at NT$880~960.</strong>
</li>
<li>The GlobalWafers points out that the results will not influence business activities, and the European market remains the importance for GlobalWafers.</li>
<li>
<strong>Comparing to 20s years ago, we think the semiconductor market has experienced a dramatic changes already</strong>.</li>
</ul>


The GlobalWafers announced the deal to merge Siltronic did not get the approval by Germany government this morning. We maintain our Target Price for GlobalWafers doesn’t change at NT$880~960.

The GlobalWafers points out that the results will not influence business activities, and the European market remains the importance for GlobalWafers.

Comparing to 20s years ago, we think the semiconductor market has experienced a dramatic changes already.


GlobalWafers (6488.TT): Maintain Target Price at NT$880-960 for Siltronic Mergence Failed

<ul>
<li>To merge with Siltronic has reached to 95% in probability for GlobalWafers now. Our target price for GlobalWafers doesn’t change at NT$880~960 and $1,200 if it finally past.  </li>
<li>Chinese government requested that GlobalWafers has to spin off its Denmark’s subsidiary 8” float zone (FZ) wafer within no more than 9 months at most.</li>
<li>Currently, Siltronic is delivering a GM of 25.6~32% during 1Q~3Q in 2021, which is competitive to Sumco, Shin Etsu. However, it shall be able to improve the GM further.</li>
</ul>


To merge with Siltronic has reached to 95% in probability for GlobalWafers now. Our target price for GlobalWafers doesn’t change at NT$880~960 and $1,200 if it finally past.  
Chinese government requested that GlobalWafers has to spin off its Denmark’s subsidiary 8” float zone (FZ) wafer within no more than 9 months at most.
Currently, Siltronic is delivering a GM of 25.6~32% during 1Q~3Q in 2021, which is competitive to Sumco, Shin Etsu. However, it shall be able to improve the GM further.


GlobalWafers (6488.TT): The Last Step to Go for Siltronic (WAF GR) Mergence

Taiwan

Globalwafers Co., Ltd. specializes in silicon wafer manufacturing and also provides solar wafers and crystal rods. The Company possesses a complete production line from ingot growth, slicing, etching, diffusion, polishing to epitaxy. Their products include Epi wafers, polished wafers, etched wafers, ultra thin wafers and deep diffusion wafers.

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Globalwafers (6488 TT)