Rising Wafer Valuations Reshape SK Siltron Sale Calculations

SK Siltron Sale Talks Drag into Seventh Month
Board Meeting Set for Discussion on the 31st
"Semiconductor Boom Changes Valuation Outlook"

The final decision on the sale of SK Siltron, which has been stalled for seven months, is now imminent.

According to industry sources on July 27, SK Inc. is reportedly set to hold a board meeting on the 31st to discuss the proposed sale of SK Siltron as a main agenda item.

SK Inc. designated Doosan Corporation as the preferred negotiating partner for the sale of semiconductor wafer manufacturer SK Siltron in December of last year. The prolonged negotiations stem largely from the need to recalculate the company’s value in light of improved semiconductor market conditions. The fundamental assumptions behind the price negotiated at the time of the initial selection were substantially upended as market dynamics shifted over the course of more than six months of talks.

As investments in artificial intelligence (AI) data centers expand, demand for wafers has increased, and the share prices of global wafer suppliers have surged accordingly, driving the need to re-evaluate SK Siltron’s price tag. SK Siltron is the only domestic company specializing in semiconductor wafers and holds the world’s third-largest market share for 12-inch wafers.

The stake up for sale amounts to 70.6%, combining SK’s direct holding of 51% and a 19.6% tranche secured through a total return swap (TRS) contract. The remaining 29.4%, held by Euisun Chung, Chairman of the SK Group, via a TRS agreement, is expected to be negotiated separately after the completion of SK’s stake transaction. SK Siltron’s corporate value, which was initially pegged at around 5 trillion won, is now being discussed at approximately 7 trillion won.

With the increase in valuation, there were rumors in June that the sale itself might be reconsidered. Critics have also pointed out that selling off such a key player in the semiconductor value chain may not align with SK’s corporate vision of becoming an “AI full-stack provider.” In early June, soon after these concerns surfaced, Chairman Chey met with journalists in Taiwan and announced a new goal to double memory production capacity within the next five years.

SK’s operating profit in the first quarter of this year stood at 3.67 trillion won, a 760% increase compared to the same period last year, while the number of affiliates decreased from 219 to 151 over two years. This group-wide rebalancing has yielded positive results and led some to suggest that the need for the sale has diminished.

However, there is strong counter-argument that the likelihood of scrapping the deal entirely remains low. Withdrawing from the sale without significant cause could negatively impact trust between the two parties as well as the group’s overall credibility. There is also continued demand for capital, as seen in SK’s recent commitment of about 400 billion won to the AI company established by SK hynix in the United States.

Personal circumstances involving Chairman Chey are cited as another variable. On July 24, the amount to be allocated as property division to Noh Soyeong, director of Art Center Nabi, was finalized at 944 billion won, making fundraising a pressing issue for him. Selling SK Inc. shares would affect his control over the group, but disposing of his personal SK Siltron stake would not, making that option more favorable for initial consideration. Chairman Chey’s 29.4% stake was valued at 750 billion won during the 2024 appellate trial.

An industry official commented, “The prolonged Siltron sale process is largely a result of market conditions diverging significantly from both sides’ original expectations. After the board meeting this week, we expect to see rapid progress either toward the sale or a re-examination of the deal, regardless of which direction is ultimately chosen.”

This content was produced with the assistance of AI translation services.