ASM Lithography Holding N.V. applies for approval to merge with Silicon Valley Group
Case:
ASM Lithography Holding N.V. applies for approval to merge with Silicon Valley Group
Key Words:
offshore corporation, merger, control-subsidiary relationship
Reference:
Fair Trade Commission Decision of December 14, 2000 (the 475th Commissioners' Meeting); Approval Decision (89) Kung Chieh Tzu No. 1087
Industry:
Manufacturing of other Scientific, Optical, and Delicate Industrial Instruments (3319)
Relevant Laws:
Summary:
1. A merger was planned between two U.S. companies, ALMA and the Silicon Valley Group, with the latter to be the surviving company. ALMA was indirectly wholly owned by Dutch ASM Lithography Holding N.V. (ASML). Once ALMA disappeared, the surviving company Silicon Valley Group would become an indirectly wholly owned subsidiary of ASML. The result of the merger would be that ASML became the indirect owner of two enterprises in Chinese Taipei: U.S. Silicon Semi-conductor Equipment Co. Ltd. Taiwan branch, which was established by the Silicon Valley Group, and Watkins-Johnson Co. Ltd., which was another subsidiary that is currently being shut down. The merger involved changes to the relationship of a Taiwan branch and subsidiary to the parent company, so an application for merger was filed with the Fair Trade Commission (the Commission).
2. To fulfill an intense demand for logical transistor operating function research and development on post-optical lithography technologies involving ultraviolet rays, SCAPEL, x-rays, and electron beams have been working on. Further, high-performance microprocessor gate length affects transistor's working speed. Among the factors involved are hot-carrier reliability and the possibility of optical impedance collapse or emission. After the merger, the Dutch ASML will have stronger research and development capabilities in the area of lithographic exposure systems. In addition, cooperation with the U.S. companies' optical technology will obviously be beneficial for use with integrated circuit prototypes and advanced semi-conductor applications. At present no such advanced optical lithography systems are produced in Chinese Taipei. Optical lithography systems are imported by the Dutch companies, and thermal processing products and optical impedance processing products are imported by the US companies. They are used at different stages in the production of optical lithography system integrated circuits. There is no significant impact on domestic market that depends on importation. The effect of the merger is limited to a change of control-subsidiary relation between the companies involved. The shareholding, business, and assets of the aforementioned Taiwan branch and subsidiary will not undergo any changes, nor will the relevant market share of the participating enterprises increase. Moreover, the business in which the enterprises are engaged falls in a market that has been fully deregulated in Chinese Taipei. There is no overlap over imported items. Other Japanese companies are currently competing in the market so that the applicants lack the ability to exclude other enterprises from access to the Chinese Taipei market. Therefore, no obvious detriments to market competition are found.
3. Reasons for granting the approval are as follows: (1)Through the offshore merger, ASML will acquire indirect control over the business operations and personnel management of the Taiwan branch and a Taiwan subsidiary of the Silicon Valley Group. The participating enterprises, however, sell different goods to Chinese Taipei, and there are no obstacles to the importation of related goods to Chinese Taipei. The merger will not raise the market share of ASML or the Silicon Valley Group's Taiwan branch in relevant markets, and will not have any obvious adverse effects on market competition. (2)After the merger, ASML will enhance its R&D capacity in the area of optical lithography exposure systems, and the Silicon Valley Group's optical technology will obviously have beneficial applications for use with integrated circuit prototypes and in rapid technological progress in advanced semi-conductor technology. The Dutch ASML imports optical lithography systems into Chinese Taipei through an agent, while the US Silicon Valley Group imports thermal processing products and optical impedance processing products into Chinese Taipei through its branch and subsidiary. The two companies have no overlap at domestic market that depends on importation. Both companies will enjoy an overall upgrade in R&D technologies through the merger. Because the overall economic benefit of the merger is greater than any possible disadvantages from restraints on competition, the merger is approved pursuant to Article 12 of the Fair Trade Law. Summarized by Chia-Hui Yang Supervised by Gin-Tsun Shin