After Habeck veto
Elmos is now selling parts of the production to the USA
06/28/2023, 11:11 am
The German chip manufacturer Elmos originally wanted to sell its wafer production to the Swedish subsidiary of a Chinese company. But the Federal Ministry of Economics bans the deal. Beijing should not have access to German technology. Now there is a new buyer.
After the veto of the Federal Ministry of Economics, the chip manufacturer Elmos Semiconductor has found a new buyer for its wafer production in Dortmund. As announced by Elmos, the US technology company Littelfuse will pay 93 million euros for the production of the wafers. These are silicon discs as the starting material for chip production.
Actually, Elmos wanted to sell the division for almost 85 million euros to a Swedish subsidiary of the Chinese Sai Microelectronics. In November, however, the federal government prohibited the sale with reference to the Foreign Trade Act. Chinese companies should not have access to German technology. The federal government still has to approve the new buyer.
However, the wafers that are manufactured in Dortmund are not high-tech. They are primarily used to produce power semiconductors for the automotive industry, which Elmos specializes in. An acceptance agreement has been signed with Littelfuse for some of the wafers produced in Dortmund, which runs until 2029, explained Elmos. Littelfuse comes from Chicago and produces fuses and many other electronic components with 18,000 employees. The company is also already represented in Germany.
The sale has no effect on the profit forecast, explained Elmos. The target for the operating return on sales (EBIT margin) for 2023 remains at 23 to 27 percent. The first installment of the purchase price of 37 million euros is intended to increase the operating cash flow in the current year. However, Elmos will invest more than previously planned, so that the operating cash flow in 2023 will be negative.