X-Fab set to buy Malaysia's 1st Silicon

MUNICH, Germany — German CMOS foundry X-Fab Semiconductor Foundries AG has agreed terms to take over the Malaysian foundry 1st Silicon Sdn. Bhd. The deal would almost double X-Fab's manufacturing capacity. A value for the deal has not been disclosed.

The majority shareholders of both companies agreed to treat the transaction as a merger on the basis of an equity exchange, but X-Fab has no plans to communicate the transaction's value, Thomas Hartung, X-Fab vice president of marketing and sales, told EE Times. The majority shareholders are Xtrion NV for X-Fab and Sarawak Economic Development Corp. for 1st Silicon.

The merger nearly doubles X-Fab's production capacity and provides the German foundry with access to 0.25-, 0.18- and 0.13-micron manufacturing processes. X-Fab also hopes to gain increased access to Asia-Pacific markets through local manufacturing capacity. Adoption of 1st Silicon's manufacturing processes will give X-Fab access to extra analog and mixed-signal applications, X-Fab CEO Hans Juergen Straub said in a statement.

The combined entity will have a production capacity of 700,000 wafer starts per year measured using 200-mm diameter equivalent wafers. With 1st Silicon consolidated within its operations, X-Fab expects revenues for 2006 of more than $300 million.

"The fusion of 1st Silicon and X-Fab creates synergies that offer advantages for our customers—fabless semiconductor companies as well as IDMs,” said Roland Duchatelet, chair of the X-Fab supervisory board, in the same statement.

X-Fab (Erfurt, Germany) operates wafer fabs in Erfurt, Plymouth, U.K., and Lubbock,Texas, with a total staff of about 1,100. Customers are mainly in automotive, consumer and industrial electronics markets.

1st Silicon specializes in high volume SoC solutions for automotive electronics, displays, multimedia devices and smart cards. In addition, 1st Silicon produces flash memory devices, CMOS image sensors and charge-coupled devices.

X-Fab posted positive results for the year to Dec. 31, 2005 with revenues up 14.3 percent over 2004 and earnings before tax nearly doubled from the previous year (see March 16 story).