On Semi buys Cypress image unit

SAN JOSE, Calif. - On Semiconductor Corp. has bought another company.

The analog and mixed-signal chip maker has acquired the CMOS image sensor business unit (ISBU) from Cypress Semiconductor Corp. in an all cash transaction for approximately $31.4 million.

As part of the transaction, approximately 80 Cypress Semiconductor ISBU employees will join On Semiconductor. The ISBU will become an integrated part of On Semiconductor’s Digital, Military/Aerospace and Image Sensor (DMI) division.

The move expands On Semi's efforts into the CMOS image sensor arena. On Semiconductor’s current products target one dimensional image sensing with particular focus on contact image sensing and ambient/proximity sensors. Once the acquisition is closed, the company will have a complete image sensing product offering between 1-D and 2-D sensors and across multiple end-markets.

Cypress’s portfolio of high-performance custom and standard CMOS image sensors are used in multi-megapixel digital photography and cinematography, machine vision, linear and two dimensional (2-D) bar code imaging, medical x-ray imaging, biometrics and aerospace applications.

The transaction is expected to close by the end of the first quarter of 2011, subject to customary closing conditions.

“The sale of our image sensor business will enable Cypress to continue to focus on programmable products including our flagship PSoC programmable system-on-chip solution and our TrueTouch touch-sensing controllers,” said T.J. Rodgers, Cypress president and CEO, in a statement.

Meanwhile, following its spin-off from Motorola Inc., On Semi several years ago acquired Cherry Semiconductor Corp. for $253.2 million. Then, starting in 2006, On Semi accelerated its efforts to reshape the company from a commodity discrete supplier into a higher-value analog/mixed-signal vendor.

Several years ago, it raised eyebrows by buying LSI Corp.'s 8-inch fab in Gresham, Oregon for $106.5 million. In 2007, On Semi acquired AMI Semiconductor for $894.1 million. The move enabled On Semi to enter the ASIC, custom chip, foundry and other markets. At the time, On Semi also purchased Analog Devices Inc.'s voltage regulation and thermal monitoring products for $148 million

Then, in 2008, On Semi purchased Catalyst Semiconductor Inc., a supplier of EEPROMs and related nonvolatile memories, for $121.7 million. Continuing on its buying spree, On Semi recently completed the acquisition of EMI chip specialist PulseCore Holdings (Cayman) Inc. for $17 million.

In 2009, On Semiconductor acquired California Micro Devices for $108 million in cash under the terms of a definitive agreement signed by the two companies.

In an effort to expand into medical chips, On Semi last year acquired privately-held Sound Design Technologies Ltd. (SDT) from an affiliate of Global Equity Capital LLC, for approximately $22 million in cash.

In July of last year, Sanyo Electric Co. Ltd. has agreed to sell its loss-making semiconductor subsidiary to On Semiconductor for $366 million in a mix of stock and cash.

On Semiconductor recently announced that total revenues in the third quarter of 2010 were $600.7 million, an increase of approximately 3 percent from the second quarter of 2010.  During the third quarter of 2010, the company reported GAAP net income of $87.8 million, or $0.20 per fully diluted share.  

The third quarter 2010 GAAP net income included net charges of $20.0 million, or $0.05 per fully diluted share, from special items.  Also included in the operating expenses during the third quarter of 2010 was approximately $5 million of acquisition related expenses.  During the second quarter of 2010, the company reported a GAAP net income of $78.7 million, or $0.18 per fully diluted share.