SunEdison to sell its Semiconductor Division

SunEdison Inc. (SUNE) the US based solar and semiconductor company is going to spin off its semiconductor division to focus solely on solar power. The company has come a long way in its solar journey. SunEdision which was earlier known as MEMC produced silicon wafers solely for the semiconductor industry till 2007. The company got into the solar business by selling polysilicon to solar wafer makers in 2008, when the prices of the raw material increased exponentially. The company was criticized heavily for buying a solar system installer and integrator SunEdison as it had no synergy with its existing business.

Read on GWI MEMC to SunEdison why the Change?

Even though its semi business floundered and solar poly and wafer manufacturing operations went into sustained losses, SunEdision flourished growing rapidly. SunEdision has mostly given up being a big solar manufacturer as Chinese competition has left the company non-competitive in solar poly and wafer manufacturing. The company got into cell and module production through JVs and third party outsourcing. The management is concentrating on solar installations. This will become even more important as the company hives of the semi wafer division. This business has not made much profits in the last 4-5 years due to overcapacity in the 300 mm wafers market. SunEdision is also a fringe player with Wacker, Shin-Etsu being much larger.

I think it may be a good move on part of the company since both these divisions have little in the way of synergy. There is almost no relation between these 2 divisions.