SK Siltron sale talks drag on 7 months — will this week bring a resolution?

Sale negotiations between SK Group and Doosan over SK Siltron, which have dragged on for more than seven months without resolution, are expected to reach a conclusion as early as this week.

According to industry sources Monday, SK Group plans to hold a board meeting Friday, at which the sale of SK Siltron is expected to be on the agenda. SK Siltron is the only domestic company producing semiconductor-grade wafers — a core base material for semiconductor chips — and ranks third globally in market share for 12-inch wafers.

SK Group announced Dec. 17 last year that it had selected Doosan as the preferred bidder for its stake in SK Siltron. The stake up for sale is understood to be 70.6 percent of SK Siltron held by SK Group, including a 19.6 percent stake tied to a total return swap (TRS) agreement. The remaining 29.4 percent held by SK Group Chairman Chey Tae-won is understood to be subject to separate sale negotiations after SK Group completes its divestment.

The two sides had initially expected to wrap up negotiations as early as May. The deal was seen as a way for SK Group to raise funds needed for its business restructuring and rebalancing, while Doosan would strengthen its semiconductor portfolio. But contrary to expectations, the talks have gone more than seven months without a conclusion.

Industry observers attribute the prolonged negotiations to the semiconductor boom. As surging AI demand drove up appetite for chips, SK Group's view of SK Siltron shifted. With the semiconductor sector in a super-cycle, the group concluded that selling SK Siltron would cost it more than it would gain.

Some analysts also note that SK Group's rebalancing effort has entered a stable phase, reducing the urgency of the sale. According to a NICE Credit Rating report, SK Group's net debt stood at 38.2 trillion won ($26 billion) at the end of last year — down more than 40 trillion won from 82 trillion won at the end of 2023. The number of group affiliates also fell from 219 to 151 over the past two years.

Even so, there is a strong counterargument that an outright cancellation of the deal is unlikely. Walking away from the sale without a significant change in circumstances or unavoidable reason — after already designating Doosan as the preferred bidder — could damage the credibility of the entire group.

A court ruling last Friday that set the asset division in the divorce between Chairman Chey and Noh So-young, director of Art Center Nabi, at 944 billion won could also factor into the SK Siltron sale. With Chey facing an immediate cash crunch, he may look to sell SK Siltron — an affiliate that does not affect the group's governance structure — to raise funds. However, some observers note that linking a divorce proceeding to the sale of a key semiconductor affiliate would create significant reputational pressure on SK Group, and that alternative options may be explored.

If both sides proceed with the sale as planned, SK Siltron's valuation is likely to be revisited. The two parties originally valued the company at 5 trillion won, but the figure is understood to have risen to more than 6 trillion won amid the recent semiconductor boom. Share prices of global wafer manufacturers have surged this year — by around 40 percent at Japan's Shin-Etsu Chemical and more than 205 percent at Taiwan's GlobalWafers.