Photovoltaic company SunEdison Inc. has filed to spin off a newly formed semiconductor wafer supplying subsidiary by way of an initial public offering of shares that could raise up to $250 million.
The subsidiary, SunEdison Semiconductor Inc., and the IPO have been formed to allow the parent company to focus on its solar power business. However, the subsidiary is currently loss-making, according to statements within the S-1 filing with the Securities and Exchange Commission.
The overall company was formerly known as MEMC Electronics Materials Inc., a wafer supplier that was and remains and provider of wafers for IC production. It branched out into the supply of wafers for solar energy conversion as well as the provision of solar cell modules and the creation of solar energy farms.
The company is now expected to use the proceeds of a sale of a minority stake in the original wafer business to fund the creation of solar energy farms.
The wafer supplier provides polished, epitaxial, and silicon-on-insulator wafers suitable for a broad range of requirements in microprocessors, memory, analog, mixed-signal and RF integrated circuits, discrete, ASICs, MEMS, and image sensors. Its leading customers in 2012 were Samsung, Taiwan Semiconductor Manufacturing Co., and STMicroelectronics, according to its filing.
The company counts itself as one of the five significant wafer suppliers that accounted for about 90 percent of all semiconductor wafer sales in a $9 billion market in 2012. The other four suppliers are Shin-Etsu Handotai, Sumco Corp., Siltronic AG, and LG Siltron.
In the first six months of 2013 the SunEdison Semiconductor business took a net loss $23.7 million on sales revenue to non-affiliated companies of $471.3 million. In the 2012 full year the company made net profit of $121.3 million on sales revenue to non-affiliates of $927.4 million. However, the operating profit was only $81.8 million, and the net profit was largely the result of a reversal of restructuring charges valued at $149.1 million.
In its filing, SunEdison quoted Gartner estimates of the size of the market it operates in. The merchant semiconductor silicon wafer market in 2012 was approximately $9 billion worldwide and is expected to grow at a 5.1 percet compound annual growth rate from 2012 to 2017, reaching approximately $12 billion by 2017, the market research firm projects.