Merck, the global leader in Display materials, has successfully completed the integration of AZ Electronic Materials into its organization early this year. For the first time, the company joins SEMICON TAIWAN 2015 under the brand name "Merck", to demonstrate its strong commitment to move into semiconductor material market. In an interview with DIGITIMES in Taipei, Dr. Bernd Reckmann, CEO of Life Science & Performance Materials, and Dr. Rico Wiedenbruch, Senior Vice President of Integrated Circuit Materials at Merck, talked about the reason Merck has decided to acquire AZ Electronics Materials, how will they gain a foothold in the semiconductor material market, and its commitment to Taiwan customers.
Merck sees growth potential in the semiconductor market
"Semiconductor is an interesting market to us", Dr. Reckmann said. "We see a lot of potential in the semiconductor industry. If you look long term, there is many opportunities in the consumer market and also in IOT trend, which will continue to prosper. Merck has always been well known for display materials, by tapping into the semiconductor industry, we see that both technologies is complementary to each other, and we are able to create more innovation by combining the both together. For Merck, it is important that we are not only dependent on the area of display, but also with IC products. For example, we can benefit from small devices because they also have sophisticated IC inside."
As semiconductor process reaches the physical limit of lithography technology, Moore's Law is now facing tougher challenges than ever. According to Dr. Reckmann, the advances of new technology nodes highly depend on the more aggressive roles that material providers play. To break through the challenges of process shrinkage, it is vital to forge a closer partnership with customers to jointly develop the materials for the advanced nodes and beyond.
Taiwan has a very key position in the semiconductor industry. The highly densified industrial cluster, complete value chain and housing leading semiconductor companies in foundry and packaging/testing services have attracted Merck to deepen its roots in Taiwan. With product offerings from AZ, Merck has increased the amount of resource dedicated to to support its business operations here, and help customers to develop innovative products. "I would like to reinforce the importance of Taiwan market to Merck and our commitment to support our customers to grow by investing in next generation technology", said Dr. Reckmann.
Through acquisition, Merck offers a broader high tech materials product portfolio
Merck already has proven success in display industry. Eyeing the future potentials of semiconductor market, Merck now can leverage a broader offering for the IC materials with the AZ acquisition. Dr. Reckmann explained the two important meanings behind this.
First, with the addition of AZ, Merck is now able to provide materials for semiconductor industry. In particular, in performance material area, Merck can offer customers with more diversified product portfolios and a wider range of technology roadmap, so that we can maximize success with our customers.
Second, customers now rely on strong partnerships and on our ability to deliver the ingredients that make the electronic devices for tomorrow faster, smarter and more attractive. Dr. Reckmann sees there are many similarity in the business: 1) focusing on high-quality material supply; 2) both semiconductor and display businesses are driven by innovation; and 3) business is driven by customer relation and customer proximity.
"We are pleased that the decision to acquire AZ was not just internal assessment. It is also a shared feeling among the investors. We also get constant positive feedback from customers in the electronic industry, who understand the logic behind the acquisition and have a lot of trust in Merck", Dr. Reckmann pointed out. The two companies have been officially integrated and operating as one since January this year, and as of now, the new organization is working well. Dr. Rico Wiedenbruch, who plays a crucial role for this, said, "The integration goes very smooth because we are both a very similar company. There is also similarity in the business model and customers. Our combined teams, driven by the needs of our customers, will be successful in capturing the compelling business opportunities ahead."
"The integration of the two operations can't be so smooth and fast without the trust from all of our team members", Dr. Reckmann continued. "And we also benefit the learnings out from our recent acquisitions Serono into the Health Care business and Millipore into the Life Science Business. This was also applied to AZ."
With a strong base in the developments of display materials and proven track records in terms of quality and innovations, Merck has been widely recognized by Taiwanese customers. By leveraging richer product portfolios obtained from AZ, Merck is fully confident to make inroads into semiconductor market to grasp bigger opportunities ahead.
Merck will continue to support Taiwan semiconductor industry by expanding resource
Taiwanese companies are globally known to be extremely professional and skillful, and are flexible in production. Merck sees a lot of potential in future collaboration with the Taiwan leading companies. As a result, the company will commit to invest more sources to support its local customers. Furthermore, Merck will speed up the transaction of acquiring US-based Sigma Aldrich, which also include taking over its high tech material subsidiary – SAFC Hitech. With the joining of SAFC Hitech, Merck in Taiwan will expand its presence to Kaohsiung, where there is an additional site, and bring total solution technologies for our semiconductor customers.
Regarding the current acquisition trends in the Semiconductor market, Dr. Reckmann believes that this is a common way to close gaps and have access to market and increase competitiveness. Taiwan is the powerhouse for global semiconductor manufacturing, and have proven success by helping customers to develop products and enhance competitiveness through advanced process technology, diligent engineers, and close customer relationships. Taiwan is also strong in packaging, where the competition is increasing. Therefore, it is crucial for packaging companies to stay strong and competitive in this area. Dr. Reckmann shares his point of view, "I think we should be aware that this trend will go on and create more strong players. The industry keeps changing, so we need to strengthen our competency to drive innovation continuously. Merck will always provide the best-in-class products and services for our customers. By growing with customers, we can create the win-win situation for each other."
Dick Hsieh, managing director (left), Dr. Bernd Reckmann, member of the executive board (middle), and Dr. Rico Wiedenbruch, head of Integrated Circuit Material (right) of Merck at company booth in Semicon Taiwan 2015.
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