LONDON – LG Siltron Inc. South Korea's sole silicon wafer maker, has hired two financial institutions to manage a proposed $450 million initial public offering, according to Reuters, which referenced a report from the International Financial Review.
LG Siltron, the world's fourth largest maker of silicon wafers, is majority owned by LG Corp. The IPO is expected in the second half of 2011 and to be worth an estimated 500 billion won (about $450 million), Reuters referenced IFR as saying. It was not revealed on which stock market or markets LG Siltron stock would be traded or whether the company has filed documents with any market authorities.
The move would appear to be an attempt to bolster the security of raw silicon wafer supply for South Korean memory chipmakers Samsung Electronics Co. Ltd. and Hynix Semiconductor Inc. LG Siltron earned nearly half of its revenue in the first nine months of 2010 from Samsung (30 percent) and Hynix (15 percent), according to the Reuters report, which said the company is seeking to expand its output of 300-mm wafers.
The money-raising effort comes at a time when Japanese wafer maker Shin-Etsu Chemical Co. Ltd., the world's leading supplier of silicon wafers, has been forced to close its Shirakawa plant, following the March 11 earthquake in Japan.
Shin-Etsu includes Korean chips companies Samsung Electronics Co. Ltd. and Hynix Semiconductor Inc. amongst its customers and the Shirakawa plant is thought to have a production capacity of between 600,000 and 700,000 wafers per month and it is not yet known when production will resume. U.S. wafer maker MEMC Electronic Materials Inc. has also stopped production at a factory north of Tokyo.
LG Siltron has hired has hired UBS AG and Woori Investment & Securities Co Ltd as lead managers, the report said.