German material giant Merck will acquire South Korean semiconductor component and material firm Mecaro’s precursor business for 110 million euros, the pair announced on Wednesday.
Merck’s South Korean subsidiary Versum Materials Korea will acquire the entire stake of Mecaro’s precursor business when it splits off in November, they said.
Precursors are chemicals used in the forming of metal thin films and circuits during DRAM production.
Mecaro’s precursor business will split off as a separate entity called M Chemical on November 1.
Out of the 110 million euros, 75 million euros will be paid first while the remainder will be paid when the precursor business reaches an agreed sales target for high-k precursors by 2023.
Mecaro’s precursor business once accounted for over 60% of its revenue up to 2019.
The company produced Zr precursors and supplied them to SK Hynix and other customers.
But SK Hynix switched its precursor supplier from Mecaro to UP Chemical when it changed its process node for DRAMs.
This has caused Mecaro to see revenues from its precursor drop significantly __ during the second quarter of this year the business unit only accounted for 34% of its revenue.
Linde and Entegris have also shown interest in acquiring the precursor unit but Merck offered the highest price to Mecaro, sources said.
Mecaro had also told its main customers SK Hynix and Samsung of the deal beforehand, they said.
