GREENSBORO, N.C. -- Looking to expand its chip-manufacturing capabilities, RF Micro Devices Inc. here today announced it will invest $60 million for a minority equity position in Jazz Semiconductor Inc., the silicon-germanium (SiGe) and BiCMOS foundry spin-off of Conexant Systems Inc.
RF Micro and Jazz have also entered into a foundry manufacturing and development arrangement. Under the deal, RF Micro will obtain a guaranteed supply of wafers utilizing Jazz's SiGe, BiCMOS, and radio-frequency (RF) CMOS processes.
RF Micro will collaborate with Jazz on the development of wireless technology roadmaps, including joint process development of next-generation RF devices.
In addition, Jerry Neal, executive vice president of strategic development and co-founder of RF Micro, will join the board of directors of Jazz. Closing of these transactions is subject to customary conditions.
Earlier this year, Conexant of Newport Beach, Calif. spun-out its mixed-signal/RF fab operations into an independent foundry, with the backing of The Carlyle Group, a private equity firm that owns 55% of the entity.
Carlyle paid Conexant $20 million and contributed $30 million in cash to the new manufacturing venture, which is set up in Conexant's Newport Beach wafer fab facility The new spin-off "specialty" foundry company is called Jazz Semiconductor (see Feb. 25 story ).
Jazz has several foundry customers, including Skyworks Solutions Inc. of Woburn, Mass. Skyworks--the new IC venture between Alpha Industries Inc. and Conexant's wireless communications business--competes with RF Micro and others in the RF and power amplifier world. Even before Skyworks was formed last year, Conexant, Alpha and RF Micro were fierce competitors in the power amp business, according to analysts.
Now, RF Micro is working with the foundry spin-off in Jazz to bolster its chip-outsourcing strategy. RF Micro has its own fabs, but it also uses outside foundries as well.
"We believe this strategic relationship strengthens our competitive position as an integral part of our customers' supply chains by providing us with a guaranteed source of supply for high-performance silicon manufacturing capacity," Neal said in a statement.
"In the near term, we expect a positive impact on cycle times, cost reductions and margin improvement efforts currently underway in our power amplifier module product line," he said. "Many of the millions of PA modules we ship each month contain the industry's most advanced power control circuitry, which is manufactured under high-voltage CMOS processes and is currently sourced through traditional foundry relationships," he said.
"By migrating to a strategic relationship with Jazz Semiconductor as a primary source of silicon, we expect a favorable impact on many of our highest running products," he added.