Chip deal reveals Germany’s wafer-thin credibility

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A wafer is seen at the new Bosch 300-millimetre wafer fab for silicon chips in Dresden, Germany, May 31, 2021. REUTERS/Matthias Rietschel

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LONDON, Jan 27 (Reuters Breakingviews) - Germany is taking a passive-aggressive approach to overseas takeovers. It’s a year since Taiwan’s GlobalWafers (6488.TWO) offered to buy German silicon wafer maker Siltronic for about 4.4 billion euros in cash read more . Yet the economy ministry in Berlin is still reviewing the bid. If it does not give the thumbs up by Jan. 31, the transaction will collapse. Shareholders aren’t holding out much hope: Siltronic shares were trading at 115 euros on Thursday afternoon, far below the 145 euro offer price.

It’s understandable that Germany wants to safeguard manufacturing capacity of wafers, a key component of semiconductors, amid a global shortage of silicon chips. The authorities could demand remedies such as a veto over future changes of ownership. What’s surprising, however, is the apparent radio silence. GlobalWafers boss Doris Hsu says she has not been able to discuss the acquisition with the government recently. The lack of clarity will discourage foreign firms from investing in the country in the future. (By Karen Kwok)

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(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)

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Editing by Peter Thal Larsen and Oliver Taslic

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