EL SEGUNDO, Calif.--International Rectifier Corp. today announced it has acquired the assets of European Semiconductor Manufacturing Ltd. (ESM), a silicon foundry company in Newport, Wales, which has been struggling with bankruptcy in the industry downturn.
IR said it bought ESM's submicron 8-inch wafer fab and operations for $81 million in cash. The mixed-signal chip-making plant will be used to increase IR's production of analog ICs and power semiconductors.
The acquisition positions IR to meet the demand for "fast-growing proprietary products over the next several years, as well as our goal of 30% overall revenue growth in fiscal 2003," said Alex Lidow, chief executive officer of El Segundo-based IR.
"We plan to invest up to $125 million more over the next five years in line with growth needs and market conditions to bring this facility to full capacity," Lidow added. "At this level, we expect the fab will be able to generate $750 million of revenue annually."
IR operates a production facility in nearby Penllergaer, Wales. Lidow said his company expects that facility to benefit from ESM's experienced work force. IR's operations will also received support from the Welsh Assembly and Welsh Development Agency in its expansion in the region, he said.
In January, ESM announced it was cutting its workforce from 527 employees to 292 as it struggled with mounting losses. ESM itself was launched after acquiring the assets and silicon foundry business of Newport Wafer-Fab Ltd. in August 1999 after that company went into bankruptcy (see Aug. 6, 1999, story). Newport Wafer-Fab traced its roots back to Inmos Corp., the U.K. chip maker that was eventually acquired by STMicroelectronics more than 10 years ago.
Including future expansion at the Newport facility, IR said it plans overall capital expenditures of less than 10% of revenues annually. IR reported $835 million in cash and marketable securities at the end of the December quarter.