Excavate Acquisition of LED MOCVD equipment giant AIXTRON reason

Since 2015, the global semiconductor industry mergers and acquisitions cases frequently, more than $120 billion, many of whom are involved in the amount of billions of dollars of the merger, but mainly concentrated in the major aspects of the industry chain, equipment and materials supporting links involving less.

At the end of May this year, the capital of Chinese, trying to buy LEDMOCVD equipment in the field of two high German giant semiconductor deposition equipment enterprises (AIXTRON), caused by love Si Qiang focus on industry.

Why Ace strong seek to sell?

First, the global LED lighting market growth slowed, the demand for LED equipment with limited space MOCVD. 2015 due to alternative light source products and other products prices fell sharply, product profits as expected, making the LED lighting market growth underpowered, LED lighting market growth slowed. Expected in 2016 to 2018 the global LED lighting market growth gradually stabilized, some alternative light source has been replaced, the market size growth rate of about 20%, the penetration rate of more than 60%. The stability of the market size and the permeability of the chip manufacturers to reduce demand for MOCVD equipment procurement, reduce the number of orders.

Along with the technical level of LED chip and continue to improve the luminous efficiency, which reduces the number of LED single chip in the use of lighting products, at the same time, a single MOCVD equipment investment amount and efficiency with the advance of technology promotion, LED chip enterprises to reduce the number of devices, then affect the number of orders for equipment enterprises. Global LED shipments with MOCVD equipment since 2010 to reach the peak of 800 units since 2012 has remained at about 200 units, so the equipment companies are facing greater competitive pressures.

Two is the Chinese mainland to become the largest market for MOCVD applications, the chip and equipment companies show a tight coupling between the relationship. 2011 began, the mainland launched a LED chip production line, the demand for MOCVD equipment to enhance significantly.

With the continuous expansion of chip enterprises in China, China has become the world's largest MOCVD equipment market. MOCVD equipment procurement from the regional distribution of view, in 2013 China's mainland accounted for more than 60% of the global market share, and increased year by year. In 2015 the number of equipment in the mainland area of more than 1000 units, accounting for the global proportion of up to 34.7%, an increase of 3.7%. Two major equipment giants Veeco and Ace, the United States are the main revenue from mainland china. 2015 Veeco revenue of 51% from Chinese customers, Ace strong revenue of nearly $200 million, of which 60% from Asia, the customer is basically the mainland LED chip companies. The requirements of the chip and equipment show a cyclical change, and there is a strong coupling relationship. In December last year, the biggest chip giant mainland Sanan optoelectronics canceled the Ace strong orders, making Ace strong reduced revenue expectations, the day the stock plunged 43%.

Three is a strong decline in Ace's revenue profits, urgent need to reduce the risk through a wealth of product mix. R & D MOCVD equipment to start the Ace strong company, has been the focus of product applications in optoelectronic devices. The rapid expansion of China's LED chip companies in 2010 to Ace has brought a large number of orders revenue, making the year revenue grew by nearly 1.6 times, the market share of nearly 60%. With the rapid rise of the United States Veeco competitors, in 2011 the market share for the first time more than Ace strong and gradually expanded, in 2015 Veeco market share of more than 60%, Ace strong decline to about 30%. Revenue in poor and high development costs makes Ace strong since 2012 has been in a state of loss, the first quarter of 2016 report shows that Ace revenue fell 47%, net loss widened to 15 million 500 thousand euros, an increase of 63% losses.

With the acceleration of technological upgrading, Ace strong attempt to expand product mix and application areas to respond to market competition. Over the past five years, Ace has invested more than $300 million in R & D costs. On the one hand continue to improve the efficiency and the number of existing LEDMOCVD devices, on the other hand, accelerate the development of new equipment technology. Ace strong hope to continue to enrich the product mix and adjust the structure, by 2020 the proportion of LED with MOCVD decreased from 49% to 22%, to enhance the compound semiconductor, OLED and other high value-added equipment revenue.

China's capital acquisition Ace strong event

China's capital acquisition Ace strong since the beginning of negotiations to reach an agreement, mainly divided into three stages. One is the acquisition of the preparation stage, February Ace announced the sale of equity, open bidding for the Chinese, Fujian Hongxin investment group (FGC) and began to contact Ace; two is the acquisition of the negotiation stage, both on the specific details of the transaction merger talks, China capital finally because of price and negotiation conditions are the major shareholder of the favor; three is the acquisition agreement, until May 23rd, FGC officially launched a takeover offer for Ace.

FGC proposed acquisition of Ace 6 euros per share, the total amount of about $670 million acquisition, the weighted average price premium over the past three months, the average price of $50.7%. Subsequent Ace strong July began to deal with the tender offer, waiting for review by the German asset Review Committee, is expected to be completed in the second half of the acquisition.

It is worth noting that the acquisition agreement stipulated in the company headquarters and R & D center position unchanged, CEO and COO and other major executives is a continuation of the existing staff, FGC will continue to support Ace strong new technology and product development, all technology and related intellectual property still belongs to Ace in all, only information will be given to the 6 board of supervisors 4 the seats in the.

The impact of acquisitions

First, the MOCVD equipment enterprises in China