To incorporate in the Netherlands because of tax rates does still not make much sense to us. Yes, it is less than US (40%) vs 25%. But if tax rates are the reason why not Ireland with 12.5% or Liechtenstein with 12.5%? Bulgaria is even lower than that. Is there another strategic consideration?
Here's an excerpt from a report by Canaccord Genuity analyst Josh Baribeau on the proposed merger:
"We see little initial disruption from the newly combined entity. We are not adjusting our ratings, targets or estimates as a result of the merger.
The most likely negative impact would be to MKS Instruments whose #1 and another top-5 customer have just combined with a stated goal of extracting costs from all layers of the supply chain. The impact to pricing and MKS' possible offsets, however, remains uncertain at this stage.
There may be a slight positive impact for Ultratech as Applied possibly gets distracted away from its smaller annealing business, and/or its customers look to diversify away from the newly merged entity in smaller or non-critical applications.
We see no overly positive or negative impact to Nanometrics.
We expect further consolidation in the equipment space, probably among the smaller suppliers as they struggle to 'go large,' but we now realize that almost any transaction size is possible."
I must say I am surprised by this merger. Consolidation in the semiconductor equipment industry is expected, but not this pairing. I think it is a bad sign for the industry as a whole. As this new company will dominate the equipment industry now.
Consolidation will only accelerate. We see it in IP market, EDA market and even in Silicon foundries. If GloFo for example megre with UMC, this will put TSMC in a different position, and change the market totally!
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