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(i) the names of the merger parties;
MOMQ Holding Company (“Momentive”);
CoorsTek KK. (“CoorsTek”)
(collectively, the "Parties").
(ii) a description of the transaction;
The notification relates to the proposed acquisition (the “Proposed Transaction”) by Momentive of CoorsTek’s crucibles business (the “Target Business”).
(iii) a description of the business activities of the merger parties worldwide and in Singapore;
Momentive
Momentive is an advanced material company engaged in the design and manufacture of ultrahigh performance quartz and ceramic products, enabling high-quality processing and production in a wide range of applications in the semiconductor, photovoltaic, lighting, aerospace, water purification, pharmaceutical, consumer electronic and telecommunication industries.
Momentive’s activities in Singapore primarily consist of the supply of quartz crucibles (for 300mm wafers), as well as miscellaneous ceramic products. Momentive manufactures the crucibles to the customers' specifications at its facility in Geestacht, Germany, and then ships the crucibles to Singapore.
CoorsTek
CoorsTek develops and manufactures a variety of products made of inorganic materials such as quartz glass, graphite, silicon carbide, silicon parts and fine ceramics for use in the production of semiconductor devices. The Target Business is active in manufacturing various grades of quartz crucibles used for single crystal silicon ingot pulling.
In Singapore, CoorsTek is involved in the sale of various ceramic products such as quartz crucibles (for 300mm wafers) to customers.
(iv) a description of the overlapping goods or services, including brand names;
The Parties submit that Momentive and the Target Business only overlap in the supply of quartz crucibles (for 300mm wafers) in Singapore.
(v) a description of substitute goods or services;
The Parties are of the view that the substitutes to the quartz crucibles (for 300mm wafers) supplied by Momentive and the Target Business include quartz crucibles (for 300mm wafers) supplied by other competing players, which are manufactured globally and imported into Singapore.
(vi) The applicant's views on:
a. definition of the relevant market(s);
The Parties consider that the market definition can be left open as the Proposed Transaction will not raise competition concerns under any plausible market definition.
However, the Parties submit that on a conservative basis and for the purposes of the notification, the Parties have assessed the competitive impact of the Proposed Transaction having regard to the plausible market for the global supply of quartz crucibles used to produce 300mm wafers.
b. the way in which competition functions in this market;
The Parties submit that the market for the manufacture and supply of quartz crucibles is a highly competitive market. Crucible manufacturers primarily compete based on the technology required to meet a customer’s specifications, along with quality and performance characteristics, and the ability to supply the product quickly and at a reasonable price.
c. barriers to entry and countervailing buyer power
The Parties are of the view that there are no material barriers to entry or expansion in the supply of quartz crucibles in Singapore. In the absence of regulatory barriers or import restrictions relating to the supply of quartz crucibles in Singapore, existing crucible manufacturers could very quickly expand their existing capacity and begin supplying quartz crucibles in Singapore.
It is also submitted that there are also no Singapore-specific barriers in securing raw materials known to the Parties.
The Parties are of the view that that there are no prohibitive switching costs involved when a customer decides to switch between suppliers. In addition, it is not uncommon for buyers in this industry to self-supply. For example, some of the buyers of quartz crucibles are vertically-integrated companies which are active in the downstream market for silicon ingot manufacturing, and they have established their own crucibles manufacturing plants which supply their own internal demand.
d. the competitive effects of the merger (non-coordinated, coordinated and/or vertical effects, as relevant).
Non-coordinated effects
The Parties submit that the Proposed Transaction will not give rise to non-coordinated effects for the following reasons:
(a) the presence of strong existing competitors who are established global players with sophisticated capabilities and who would be able to continue to exercise strong competitive constraints on the merged entity post-merger;
(b) the absence of material barriers to entry or expansion in the supply of quartz crucibles in Singapore; and
(c) the ability of customers to switch easily between suppliers of quartz crucibles, or to self-supply.
Coordinated effects
The Parties submit that the Proposed Transaction will not give rise to coordinated effects for the following reasons:
(a) the presence of strong competitors active in the supply of quartz crucibles, and the ease of switching by customers in the industry creates strong commercial incentives for suppliers to continue pricing competitively, which reduces the sustainability of coordinated behaviour and makes it difficult for competitors to align their behaviour; and
(b) the absence of material barriers to entry in the supply of quartz crucibles, and accordingly, high potential for increased competition, which similarly creates disruptive effects and reduces sustainability of any coordinated behaviour.
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