GlobalWafers to issue US$500m in bonds to Micron

CORPORATE RELATIONS: The 10-year convertible bonds would be issued to bolster ties between the companies following an agreement to collaborate

GlobalWafers Co (環球晶圓), the world’s third-largest silicon wafer supplier, yesterday said it plans to issue unsecured convertible bonds of up to US$500 million in a private placement, with US memory chipmaker Micron Technology Inc as the sole subscriber.

Hsinchu City-based GlobalWafers said in a statement that its board approved the bond issuance plan at a meeting yesterday.

The 10-year convertible bonds would be issued to Micron to bolster ties with the US chipmaker following an agreement reached by the two companies in July to collaborate under a 10-year agreement.

GlobalWafers Co’s plant in Sherman, Texas, is pictured on Aug. 15.

Photo: CNA

The bonds would carry an annual coupon rate of 0.5 percent, GlobalWafers said.

The agreement is designed to combine long-term supply commitments with strategic financial cooperation to support the development of GlobalWafers’ US operations and enhance its capacity to supply advanced semiconductor wafers.

Under the arrangement, Micron is to subscribe to the bonds, providing GlobalWafers with US$500 million in financing.

“Our deeper collaboration with Micron reflects both the trust developed over many years and a broader industry shift from traditional supplier relationships toward sustained strategic partnerships,” GlobalWafers chairwoman and CEO Doris Hsu (徐秀蘭) said in the statement.

“By aligning customers’ future needs with timely manufacturing investment, we can reinforce supply chain resilience across market cycles and create sustainable value for the global semiconductor industry,” Hsu said.

The private placement plan is subject to shareholder approval, GlobalWafers said.

Ahead of the planned bond issuance, GlobalWafers completed a US$1.432 billion global depositary receipt offering in September to finance raw material purchases and overseas production expansion and enhance its financial structure. The offering was the third-largest global depositary receipt issuance by a Taiwanese company on record.

GlobalWafers said it posted net profit of NT$7.18 billion (US$219.2 million) in the first nine months of this year, or earnings per share of NT$15, close to the NT$15.29 recorded for the whole of last year.

Consolidated sales during the nine months fell 4.4 percent from a year earlier to NT$44.07 billion, the company said.

The board also approved a cash dividend of NT$6 per share based on earnings per share of NT$11.87 in the first half of the year.

GlobalWafers is to distribute a total of NT$3.169 billion in cash dividends on Jan. 22, after its shares go ex-dividend on Jan. 4, the company said.

GlobalWafers, which has expanded its operations significantly through mergers and acquisitions, operates 18 facilities in nine countries: Taiwan, China, the US, Japan, Denmark, South Korea, Italy, Malaysia and Singapore.