SK Group’s mega-deal to sell its semiconductor wafer affiliate SK Siltron to Doosan has finally closed after seven months of arduous negotiations. Beyond the base purchase price, the two sides included conditions for additional payments tied to future performance and asset disposal results, resolving their differences over the company’s valuation.
SK Inc. (034730) held a board meeting on the 31st and approved a stock purchase agreement to sell its 70.6% stake (47,322,350 shares) in SK Siltron to Doosan (000150) for approximately 2.3 trillion won (approximately $1.6 billion). The transaction is expected to close on January 31 next year. The stake being sold combines a 51% stake directly held by SK Inc. and a 19.6% stake over which it holds economic rights through a total return swap (TRS) contract. The remaining 29.4% stake personally held by SK Group Chairman Chey Tae-won is excluded from this deal, with a decision on its potential acquisition to be made through separate negotiations later.
The crux of this deal is the “earn-out” clause designed to narrow the valuation gap between the two parties. As SK Siltron’s valuation soared during the semiconductor super-cycle, negotiations reached an impasse. Instead of sticking to a fixed sale price, both sides opted for a structure that shares future upside based on performance.
There are three main conditions under which SK can receive additional payments. First, a performance-linked component. If SK Siltron’s annual EBITDA exceeds contractually stipulated thresholds over the eight years from 2027 to 2034, SK will receive an additional amount equal to 40% of the excess multiplied by its stake percentage. The threshold rises gradually from 890 billion won (approximately $619.5 million) in 2027 to 1.7 trillion won (approximately $1.2 billion) in 2034.
Second, a quality certification-linked component. Each time SK Siltron completes quality certification for four specific products targeting particular clients between 2026 and the first half of 2029, an amount of 25 billion won (approximately $17.4 million) per product, multiplied by the stake percentage, will be paid.
Third, an asset disposal-linked component. If the assets held by SK Siltron’s U.S. subsidiary, which is slated for liquidation, or other separately earmarked assets are disposed of at a price higher than their book value, the profit multiplied by the stake percentage will be additionally settled. This structure effectively adds an “alpha” to the 2.3 trillion won base price.
Founded in 1983, SK Siltron is South Korea’s only manufacturer of silicon wafers for semiconductors. Since becoming part of SK Group in 2017, it has grown to rank third globally in the 12-inch (300mm) wafer market. Last year, it posted revenue of 2.06 trillion won (approximately $1.4 billion) and an operating profit of 193.1 billion won (approximately $134.4 million). More than 80% of its core product portfolio is tied to long-term supply contracts, resulting in relatively low earnings volatility. Its new factory in Gumi, built with an investment of about 2.3 trillion won, is expected to begin full-scale operations in the third quarter of this year, which should accelerate top-line growth.
With this acquisition, Doosan has expanded its semiconductor business value chain across the board. Doosan’s Electronics BG produces copper clad laminate (CCL), a key material for AI accelerators, while its affiliate Doosan Tesna is the top domestic player in back-end semiconductor wafer testing. By adding wafers—a core front-end material—it has completed vertical integration spanning from materials to back-end processing. Notably, SK Siltron’s global customer base, which includes Samsung Electronics and Intel in addition to SK Hynix, is expected to significantly broaden Doosan’s previously limited customer touchpoints.
Doosan plans to nurture SK Siltron over the long term without pursuing a separate listing. Projecting an average annual growth rate of around 7% for the wafer business, it has set a target of achieving 3 trillion won in revenue by 2031 through expanded production capacity and enhanced competitiveness in high-value wafers.
SK Group intends to concentrate the proceeds from this sale on future growth businesses such as AI, semiconductors, and energy. SK stated the goal is “to improve financial soundness and secure resources for future growth engines.” Having pursued a rebalancing effort since 2024 to streamline overlapping businesses and non-core assets, SK Group has now reached the pinnacle of its restructuring with this deal. Industry observers also interpret the finalization of Chairman Chey Tae-won’s 944 billion won (approximately $657.1 million) property division payment to Noh So-young, director of Art Center Nabi, as a factor that heightened the need to raise substantial cash.
Meanwhile, SK Siltron’s loss-making silicon carbide (SiC) wafer division is undergoing liquidation. SK Siltron CSS, the U.S. production subsidiary acquired in 2020, has posted annual operating losses due to slowing EV demand and global oversupply, recording a loss of 54.1 billion won (approximately $37.7 million) in the first quarter alone. Once the liquidation is completed within the year, SK Siltron’s profitability is expected to improve further.
However, some critics argue that this acquisition merely expands Doosan’s business portfolio without creating meaningful synergies. A semiconductor industry source commented, “It appears Doosan prioritized absolute revenue growth across its three pillars of energy, construction equipment, and semiconductors in pursuing this acquisition,” adding, “The wafer business is closely tied to raw material processing and device companies, and has almost no connection points with Doosan’s existing affiliates.”