| Type | Public |
|---|---|
| Traded as | NYSE: WFR |
| Industry | Semiconductors |
| Founded | 1959 |
| Headquarters | St. Peters, Missouri |
| Key people | Ahmad Chatila, President & CEO |
| Products | Polysilicon, Semiconductor Wafers, Solar Wafers, Photovoltaic Plants, |
| Revenue | US$1.16 billion (2009)[1] |
| Operating income | US$127 million (2009)[1] |
| Employees | 5,100 (2009) [1] |
| Website | www.memc.com |
MEMC Electronic Materials (NYSE: WFR) is a United States manufacturer of silicon wafers for the semiconductor industry. Originally established in 1959 as the Monsanto Electronic Materials Company, a business unit of Monsanto Company, the company is based in St. Peters, Missouri.
Ahmad Chatila is the current President and Chief Executive Officer of MEMC. Mr. Chatila was appointed President and Chief Executive Officer and a member of the Board of Directors of MEMC on March, 2nd 2009[2].
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Monsanto Electronic Materials Company (MEMC) was established on August 6, 1959 as part of the US-based multinational corporation Monsanto. In the same year MEMC starts the production of 19-mm-silicon-Wafers in St. Charles County, Missouri. As one of the first corporations to produce semiconductor wafers, MEMC is considered a pioneer in this field, its innovations becoming industry standard for years. MEMC uses the Czochralski process, develops Chemical Mechanical Polishing (CMP) and starts production of 1,5-inch-wafers. In 1966 MEMC installs the first reactors for production of EPI-wafers and develops zero-dislocation-crystal-growing.
During the 70s MEMC opens a production plant in Kuala Lumpur (Malaysia). Step by step diameters of wafers are increased to 5 inches. In 1981 MEMC constructs a production and R&D-facility in Japan, specifically in Utsunomiya, as the first non-Japanese corporation. 3 years later the production of 200 mm wafers is started by MEMC on economic scale, with the corporation taking on a pioneering role again. [3]
High price pressure from Japanese competition leads to an ever increasing pressure on MEMC during the 80s. Despite increasing revenues MEMC has to account for losses for several years, leading to the decision of Monsanto to sell the company. In 1989 MEMC is bought by Dynamite Nobel Silicons (DNS), a subsidy of the german Hüls AG, which itself is part of the German VEBA AG. DNS already operates silicon wafer plants in Meran and Novara, Italy and integrates them within the new MEMC Electronic Materials, Inc. Hüls supports the new subsidy with 50 million USD, mainly used for research and development. MEMC starts the production of granular polysilicon in 1991 and as the first company produces 300 mm wafers on a commercial scale in 1991. Four years later MEMC acquires production capacities for granular polysilicon in Pasadena, Texas.
Trading of MEMCs stock at the New York Stock Exchange starts after an initial public offering in 1995. VEBA can convert part of its stock into 440 million USD but retains the majority voting rights in the corporation. The cyclical downturn in the semicondutor business hits MEMC hard. In 1998 the company has to report a loss of 316 million USD with revenues of 759 million USD. A significant improvement in turnover and earnings figures cannot be achieved in the following years.
In June 2000 VEBA AG, still holding 72 % of MEMC, is merged with VIAG to form the new E.ON AG. E.ON wants to focus on its core businesses and assigns Merrill Lynch to sell MEMC. Merrill is unable to find a buyer until MEMC announces to be on the verge of illiquidity in the middle of the year. Finally E.ON is able to agree on a deal with the private-equity-company Texas Pacific Group (TPG). MEMC is sold for a symbolic dollar and 150 million USD in credit lines. [4] [5] [6]
By restructuring the debt of MEMC TPG is able to raise its share on the company. TPG conducts cost cutting measurements and cuts the number of employees from 7,000 to 4,000. In addition it convinces customers that MEMC will stay in business. The market share of MEMC rises again and by 2002 MEMC is able to report positive earning figures.
After a significant improvement of key figures, in 2005 TPG reduces its share on MEMC to 34 % through a secondary offering. The revenue of this transaction is more than 750 million USD, none of them going to the coffers of MEMC. [7]
With the boom of the photovoltaic industry MEMC is able to agree on several long term contracts for delivery of solar wafers. Starting in 2006 a volume of several billion USD is contracted, e.g. with Suntech Power [8][9], Tainergy Tech [10], Gintech Energy [11] or Conergy.
Based on high spot prices these contracts do not only guarantee high delivery volumes at fixed prices, but MEMC is also able to collect significant prepayments. Already in the middle of 2008 the significant drop in prices for solar wafers leads to disputes over those long term agreements. MEMC has to cut the deal with Conergy with a volume of 8 billion USD in half. Despite that Conergy applies to the courts to declare the contract invalid and void. Only in 2010 do both companies agree to renegotiate the deal out of court. MEMC has to agree on a reduction of the sales volume to less than one billion USD as the original contractual conditions would place Conergy in an economic position it could not survive. [12] [13]
In 2009 MEMC and Q-Cells - specialized on construction and operation of photovoltaic plants - found a joint venture to erect a photovoltaic plant with 50 MWp in Straßkirchen, Bavaria. Both partners invest 100 million USD each, in return for a 50 % ownership on the project. As planned, the plant is sold to an alternative energy fund of Nordcapital after operations started at the beginning of 2010. [14] [15]
At the end of 2009 MEMC buys SunEdison, a North-American company planning large-scale photovoltaic projects, and financing, constructing and operating them. SunEdison is the largest operator of solar power plants in North America. The company is taken over for 200 million USD, 70 per cent thereof paid in shares of MEMC, 30 % in cash. An additional 90 million USD have to be paid depending on target achievement in 2010. [16] [17]
MEMC acquires the California-based solar tech company Solaicx mid-2010. By paying 76 million USD, MEMC gets access to the continuous crystal pulling technology of Solaicx, which enables the production of cheap mono-crystalline solar wafers. [18]
In February 2011 Samsung Fine Chemicals and MEMC announced a 50/50-Joint Venture to build a polysilicon production plant in Ulsan, South-Korea. The plant will have an initial capacity of 10,000 tons per annum. [19]
December 2011 MEMC announces restructuring measures to react on a cyclical downturn in its semiconductor business and a slump in the whole supply chain of photovoltaic modules. A headcount reduction of 1.300 employees (18 % of the workforce) an a reduction of capacity for polysilicon and solar wafers is announced. Restructuring charges of 1 USD bn, 180 USD mn thereof cash costs are announced. [20]
Since the acquisition of SunEdison MEMC has three reporting segments.
| Location | Products | Ownership |
|---|---|---|
| Chonan, Korea | polished wafers | 80 % MEMC, 20 % Samsung |
| Hsinchu, Taiwan | polished and epitaxial wafers | MEMC |
| Kuala Lumpur, Malaysia | polished wafers | MEMC |
| Meran, Italy | mono-crystals, polysilicon | MEMC |
| Novara, Italy | polished and epitaxial wafers | MEMC |
| Pasadena, Texas, USA | granular polysilicon, monosilanes, SiF4 gases | MEMC |
| St. Peters, Missouri, USA | 100mm - 300mm wafers | MEMC |
| Sherman, Texas, USA | 200mm wafers | MEMC |
| Utsunomiya, Japan | 125mm - 300mm wafers | MEMC |