Brothers climbing mountains together may not have a smooth journey.

ASE and SPIL announced yesterday that they will form an industry holding company under mutually agreed conditions. ASE Chairman Terry Gou and SPIL Chairman C.Y. Lin appeared together on stage, staging a grand reconciliation, but the outside world remains somewhat puzzled.

Terry Gou and C.Y. Lin smiled as they announced their collaboration yesterday and also expressed mutual hopes to continue striving together for Taiwan’s semiconductor industry. However, legal circles and industry insiders still have many concerns. After all, ASE and SPIL aim to maximize corporate profits and shareholder interests, but in the future, they will be in a situation where brothers climb mountains separately and strive on their own—it is not easy to maintain healthy competition in practice.

Since ASE proposed in August last year to make a public tender offer for SPIL, the management teams of both sides have refused to back down. They not only engaged in media and advertising battles but SPIL executives also emphasized that the merger would not bring synergies. However, the semiconductor market changes rapidly, and with continued consolidation among international giants, industry competition has become increasingly fierce. ASE and SPIL have already felt the pain in the first quarter of this year—the average quoting price for packaging and testing orders dropped more than 5% in a single quarter, a situation unseen in the past 10 years.

Therefore, as ASE’s chairman continues to extend an olive branch to SPIL, SPIL Chairman C.Y. Lin has decided to accept it.

However, although ASE and SPIL have gone from being rivals to partners, whether they can truly withstand the rapid changes in the market is something everyone is waiting to see.

It is understood that in early April this year, Terry Gou and ASE Chief Operating Officer Tien-Yu Wu personally visited C.Y. Lin again. The two sides exchanged views on the agenda items of SPIL’s shareholders’ meeting. SPIL agreed to withdraw the proposal to increase capital stock and also agreed to terminate the cooperation with Tsinghua Unigroup. ASE, in return, promised full support. As a result, at the SPIL shareholders’ meeting, ASE voted in favor of all proposals, which was also equivalent to an early announcement of a major reconciliation outcome.

And one day before the SPIL shareholders’ meeting, Terry Gou and C.Y. Lin met again. At that time, they successfully agreed to move toward forming a holding company under mutual consent. ASE will acquire all of SPIL’s shares other than those it already holds at a price of NT$55 per share, allowing C.Y. Lin and SPIL General Manager Choy Chi-Wen to join the holding company’s board of directors, while also maintaining SPIL’s independent operations. This gives the SPIL team a graceful way out, finally bringing a perfect resolution to the long-standing ASE-SPIL saga.