SAN JOSE, Calif. Two chip makers Conexant and RF Micro Devices are separately set to benefit from the pending acquisition of Jazz Semiconductor Inc.
Acquicor Technology Inc., the ''blank check'' equity firm run by three former executives from Apple Computer Inc., Tuesday (Sept. 26). said that it has acquired specialty foundry provider Jazz Semiconductor for $260 million in cash. The equity firm was recently formed by three industry veterans from Apple and other companies: Gilbert Amelio, Ellen Hancock and Steve Wozniak. Acquicor (Newport Beach, Calif.) does not make or sell any products, but rather it will seek acquisitions in the technology sector.
Conexant Systems Inc. (Newport Beach, Calif.) expects to receive cash proceeds of approximately $100 million when Acquicor Technology completes its merger with Jazz Semiconductor.
Conexant owns approximately 42 percent of Jazz, a wafer foundry. In 2002, Conexant spun-out Jazz, which had been part of Conexant's captive semiconductor operations.
Jazz's initial customers consisted of Conexant and Skyworks Solutions Inc., created from the spin-off of Conexant's wireless business and the merger with Alpha Industries in 2002.
Since then, Jazz has expanded its customer base. These new customers include Freescale Semiconductor Inc., Marvell Technology Group Ltd., Texas Instruments Inc., and RF Micro Devices.
"Jazz has been an important supplier for Conexant since its inception, and I expect our relationship to continue," said Dwight W. Decker, Conexant chairman and chief executive, in a statement. Conexant expects to record a modest gain when the Acquicor-Jazz transaction closes.
As a result of the deal, RF Micro Devices Inc. (Greensboro, N.C.) expects to sell its equity interest in Jazz Semiconductor for an aggregate cash consideration of approximately $24-to-$27 million.
RF Micro expects to take a non-cash GAAP charge in its second quarter to reduce the carrying value of its original investment in Jazz. Prior to the announcement of the pending Jazz/Acquicor transaction, RF Micro had valued its investment in Jazz at approximately $60 million.
Bill Pratt, co-founder and chief technical officer of RF Micro, said the RF chip maker would continue its foundry relationship with Jazz. "RFMD and Jazz have worked together since 2002 developing state-of-the-art silicon process technologies targeted for next-generation mobile devices," he said in a statement.
"RFMD's next-generation single-chip EDGE transceiver, which we expect will ramp at Jazz in the first half of calendar year 2007, utilizes a specialized CMOS process jointly developed between the two companies," he said. "Additionally, our existing agreements with Jazz regarding supply, wafer credits and joint development activities remain intact, and we expect to continue a mutually beneficial partnership following the merger."