On August 25th, ON Semiconductor announced on its official website that they have reached a final agreement with SiC manufacturer GTAT. ON Semiconductor will acquire GTAT for US$415 million (approximately RMB 2.687 billion) in cash.
GTAT once monopolized the photovoltaic polysilicon equipment market 100%, and realized the commercial production of 6-inch SiC.
After the completion of the acquisition, ON Semiconductor plans to invest in GTAT's SiC research and development work to advance 6-inch and 8-inch SiC crystal growth technology, and will also invest in more SiC supply chain links, including fab capacity and packaging lines.
According to ON Semiconductor's statement some time ago, in terms of SiC, ON Semiconductor's capital expenditures in 2022 and 2023 are expected to account for about 12% of total revenue.
ON Semiconductor`s total revenue in fiscal year 2020 is approximately US$5.255 billion, which means that in the future, ON Semiconductor’s SiC investment will reach approximately RMB 4 billion.
In fact, as early as March 2020, ON Semiconductor has in-depth cooperation with GTAT, and the two parties signed a five-year, US$50 million SiC material production and supply agreement.
In addition, GTAT also supplies SiC materials for Infineon and Taiwan Global Wafer. This acquisition may allow Infineon and other companies to re-select other SiC suppliers. In fact, in May of this year, Infineon has signed a multi-year supply agreement for SiC materials with Showa Denko of Japan.
According to a senior person in the photovoltaic industry, GTAT used to be a monopolized photovoltaic and sapphire equipment supplier. Before 2014, almost 100% of ingot furnaces were produced by it.
However, due to the downturn in the photovoltaic market, it directly affected the photovoltaic equipment industry. In 2011, GT Solar changed its company name to GTAT, gradually expanding from the solar industry to high-growth markets such as the LED industry.
Later, GTAT wanted to enter the mobile phone sapphire screen market. In November 2013, GTAT and Apple reached a cooperation agreement worth 3.472 billion yuan to build a sapphire factory in Arizona, USA, and build 2,036 furnaces.
However, due to the sapphire screen yield rate produced by GTAT is only 50%, Apple's latest generation of iPhones did not use GTAT's sapphire glass, causing GTAT to suffer a heavy blow.
In October 2014, GTAT announced a voluntary application for bankruptcy protection. The CEO of GTAT stated that the purpose of filing for bankruptcy is to protect the financing plan to raise additional funds, so that GTAT can continue to operate during the bankruptcy and reorganization period and look for new opportunities.