LG Siltron produces 300mm silicon wafers which are major basic material for semiconductor chips. The company has been a non-core affiliate after LG withdrew from the semiconductor business. To make matters worse, Chinese low-priced competitors, such as Solar and Sapphire, has emerged from the early 2010s, leading to lower earnings of LG Siltron. The company had to suffer from losses of 18 billion won (US$15.71 million) in 2013 and 34.8 billion won (US$30.37 million) in 2014, respectively.
In addition, LG Siltron didn’t have enough money to invest in developing new technologies so the company couldn’t fight back with Japan’s Shin-Etsu Chemical and SUMCO which account for more than a half of shares in the global wafer market. For instance, LG Siltron didn’t have money to invest in facilities to produce wafers for solar panels so stopped the business. The company is estimated to have the fourth highest market shares with 10 to 14 percent in global markets for 300mm wafers.
However, LG Siltron is acquired by SK Group, which promotes semiconductors as its main business with SK Hynix as the center, and the company is now planning to take the leap once again. SK Corporation announced on Jan. 23 that it would purchase a 51 percent stake in LG Siltron from LG Corporation for 620 billion won (US$541.01 million). Once the acquisition is completed as early as September, LG Siltron will change its corporate name to SK Siltron and play a leading role in the semiconductor vertical integration promoted by SK.
LG Siltron, which supplies wafers to Samsung Electronics and Toshiba as well as SK Hynix, will focus on producing 300mm wafers, which are generally used by global semiconductor companies, a for a while, establishing a foothold for growth.