PV Wafer Maker SunEdison Announces $90Million IPO

May 22, 2014 by Jeff Shepard

SunEdison Semiconductor Limited announced today the pricing of its underwritten initial public offering of 7,200,000 ordinary shares at a price to the public of $13.00 per share. The shares will begin trading on the NASDAQ Global Select Market today under the ticker symbol "SEMI." In connection with this offering, SunEdison Semiconductor has granted the underwriters a 30-day option to purchase up to an additional 1,080,000 ordinary shares at the initial public offering price, less the underwriting discount. This IPO will establish a market value in excess of half-a-billion dollars for SunEdison.

In line with the increasingly-competitive nature of the PV panel market, SunEdison revenue has declined the last three years, and the decline continued into Q1 '14. SunEdison is reported to have made $122 million in 2012 after losing $557 million in 2011. In 2013 SEMI lost $55 million. Samsung Fine Chemicals, and Samsung Electronics Co., Ltd., have agreed to purchase $100.0 million and $33.9 million, respectively, in a concurrent private placement.

SunEdison’s silicon wafers fall into one of three general types: Prime Polished, Epitaxial, and Test/Monitor wafers. They are also differentiated by product or process type, and diameter; 100mm, 125mm, 150mm, 200mm, and 300mm. These silicon wafers also vary in surface features (polished or epitaxial), composition, purity levels, crystal properties, and electrical properties. They are manufactured according to the precise specifications required by our customers. Semiconductor manufacturers require wafers of larger diameter and more stringent technical specifications in order to produce increasingly complex semiconductor devices such as the larger megabit memory chips and microprocessors.

The company’s customers have increased their focus on efficient semiconductor production processes because their manufacturing processes for semiconductor devices have become more expensive. Our customers make many semiconductor devices, or chips, from the same wafer, and all chips from a particular wafer are manufactured and processed simultaneously at each stage in the device manufacturing process. Because of this, larger-sized wafers allow for a greater throughput from the same semiconductor manufacturing process and allow semiconductor manufacturers to spread their fixed costs of production over a larger volume of finished products.

For example, a 6-inch (150mm) wafer has a surface area of approximately 27.4 square inches, whereas an 8-inch (200mm) wafer has a surface area of approximately 48.7 square inches. Thus, the 8-inch wafer has approximately 78% more surface area than the 6-inch wafer. A 12-inch (300mm) wafer has a surface area of approximately 109.6 square inches or approximately 125% more surface area than an 8-inch wafer. Despite the industry's focus on larger diameter wafers, SunEdison continues to manufacture and sell a significant amount of 4-inch (100mm), 5-inch (125mm), and 6-inch (150mm) wafers.