Decision on stalled sale of SK Siltron likely to come this week

SK Siltron's headquarters in Gumi, North Gyeongsang Province / Courtesy of SK Siltron

Talks between SK Group and Doosan Group over the sale of a controlling stake in SK Siltron are expected to conclude this week, seven months after Doosan Corp. was selected as the preferred bidder.

According to industry officials on Tuesday, SK Inc. is considering putting the sale of its 70.6 percent stake in silicon wafer maker SK Siltron on the agenda for its board meeting on Friday.

As part of its portfolio reorganization, SK Group selected Doosan Corp. as the preferred bidder for the stake in December last year. The two sides were initially anticipated to reach a sale and purchase agreement within the first half of this year, but both repeatedly said in regulatory filings that a definitive agreement had not yet been finalized.

At the time, SK Siltron was valued at around 5 trillion won ($3.4 billion). This year, however, the value of silicon wafers has increased as a result of the semiconductor upcycle, with the company's valuation now estimated at around 7 trillion won, prompting SK to put the agreement on hold.

SK Siltron is the world's third-largest silicon wafer maker by revenue, and its strategic value within the SK Group has risen as growth in the global artificial intelligence (AI) industry has increased the importance of securing a stable wafer supply.

SK Group has shifted its portfolio from energy and telecommunications to semiconductors and AI infrastructure, raising questions over whether selling the company still aligns with its broader strategy.

SK Group initially sought to sell SK Siltron to secure liquidity and improve its finances, with SK Siltron having 2.6 trillion won in net debt as of the end of the first quarter. However, the group's financial position has improved this year, led by memory maker SK hynix, and SK no longer needs to rush the sale.

Industry officials said that the most likely scenario is the two sides reaching a deal at a higher price, but added that the possibility of SK Group calling off the negotiations and exploring other options cannot be ruled out.

Doosan Group is waiting for talks to progress so it can proceed with the acquisition of SK Siltron and strengthen its semiconductor materials business. Doosan Corp.'s operating profit rose 37.8 percent year-on-year to 488.4 billion won in the second quarter, driven by strong demand for semiconductor substrate materials. The acquisition of SK Siltron is expected to further bolster the business.

During an earnings call on Monday, Doosan Corp. said its “deal team has continued negotiations since the company was selected as the preferred bidder” and it will “make regulatory filings as soon as the deal is finalized.”