LONDON Filtronic plc has sold its compound semiconductor division, FCSL, to RF Micro Devices Inc. for just £12.5 million (about $25 million) in cash. The deal provides for RFMD to retain the fab at Newton Aycliffe, England, which is already a supplier of GaAs pHEMT semiconductors to RFMD.
The agreement, expected to be finalized at the end of February 2008, also includes the new owner supplying GaAs devices for Filtronic's Point to Point business which focuses on transceiver modules and filters for backhaul microwave radios linking mobile basestations for at least 3 years.
The price also includes the purchase of FCSL's milimeter wave RF semiconductor bsuiness
RF Micro Devices (Greensboro, NC) focuses on wireless related activities, including cellular transceivers, power amplifiers and GPS components, as well as Gallium Nitride based high power amplifiers.
Earlier this year the company said it would expand its compound semiconductor manufacturing capacity to support anticipated growth at both its cellular handset PA and multi-market product groups.
Commenting on the deal, Bob Bruggeworth, president and chief executive officer of RFMD, said : "The acquisition of Filtronic Compound Semiconductors is expected to increase our manufacturing volume, lower our overall cost structure and provide RFMD with a high-volume supply of GaAs pHEMT, all of which support our aggressive growth expectations for cellular front ends."
He added the addition of Filtronics' millimeter wave business will enable RFMD's newly established Multi-Market Products Group to diversify into new growth markets.
Last year, RFMD sold a large portion of its Bluetooth related efforts to Qualcomm Inc.
Filtronic said late November it is in discussions to sell the compound semis foundry and operation.
And earlier his year, Filtronic's CEO Charles Hindson told EE Times the thorough review of the compound semiconductor operation that started in July envisaged deep cuts in manufacturing, mainly due to the company losing its primary customer for the wafers made there, and may even mean the closure of the whole operation, which is the only volume maker of GaAs devices in Europe.
The gross value of the operation being sold is put at £23.5 million as at 31 May 2007 with underlying losses before exceptional items attributable to the assets for the year ended 31 May 2007 of £1.5million and a headline loss including exceptional items of £29.0 million.
Following completion, Filtronic will cease its activities in compound semiconductor manufacture and supply, in which it has been a major European leader for many years. The facility at Newton Aycliffe was originally a memories fab built in the 1990s with much fanfare by Fujitsu Semiconductors.
Filtronic (Shipley, England) said the proceeds of the sale will be retained and used for "general corporate resources."
Last year, Filtronic was set to sell the bulk of its wireless infrastructure operations to another U.S. company, Powerwave Technologies, Inc. (Santa Clara, California) in a deal valued at about $336 million. However, the terms subsequently had to be revised to reflect Powerwave’s shrinking share price, and the final deal meant Filtronic $185 million in cash and 17.7 million newly issued shares of Powerwave common stock.