NEWPORT BEACH, Calif. -- Conexant Systems Inc. today announced plans to form a new "specialty" foundry company to fabricate high-performance ICs, including the use of its silicon-germanium BiCMOS technology. To do that, Conexant has stuck an agreement with The Carlyle Group, a private equity firm, which will own 55% of the new spin-off foundry company.
Under the terms of the agreement, Carlyle will pay Conexant $20 million and contribute $30 million in cash to the new venture, which will be based in Newport Beach. For its 45% stake in the foundry company, Conexant will contribute specialty process technologies and the manufacturing equipment in its Newport Beach wafer fab facility.
The creation of a new foundry company is the latest move by Conexant to spin off operations into new ventures. Two months ago, the company announced it would merging its wireless IC business with Alpha Industries Inc. to form a new supplier of integrated radio-frequency chips for cellular phones (see Dec. 17 story). The year before, Conexant spit itself in two creating an Internet infrastructure chip company, called Mindspeed Technologies Inc.
Conexant said its three businesses targeting the mobile communications, broadband access, and Internet infrastructure markets will be served by the new foundry company under long-term supply contracts. The foundry company--which does not yet have a name--will have 650 employees and revenues of approximately $150 million in the first year of operation, said Conexant.
The new foundry's fab will have a capacity of 20,000 eight-inch (200-mm) wafer starts per month. Its Class 1 cleanroom is 100,000 square feet, according to Conexant.
"We believe the foundry market is now ready to expand from mainstream CMOS wafer manufacturing to include sophisticated specialty-process capabilities, and in the process enable the development of a new market segment of fabless radio-frequency-centric semiconductor product companies," said Dwight Decker, chairman and CEO of Conexant.
While most independent silicon foundry companies are focused on CMOS technologies, a number of major manufacturers are active in SiGe technologies. IBM Corp. has pioneered SiGe commercial technologies and it has been offering foundry services for about four years. Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC) is also offering SiGe processes based on licensing pact with Conexant, and other companies are gearing up to offer silicon-germanium capacity.
The new specialty foundry company will immediately offer 0.35-micron SiGe BiCMOS processes, which support ICs operating at frequencies up to 70 GHz, according to Conexant. The foundry spin-off venture will focus its ongoing R&D on a next-generation SiGe BiCMOS technology, with 0.18-micron feature sizes and operating frequencies greater than 160 GHz, said the Newport Beach company.
The 0.18-micron SiGe BiCMOS technology is slated to be released into production in the second quarter of 2002. In addition, the new company will complete the development of a further enhanced 200-GHz SiGe BiCMOS process, which Conexant said will bring the cost advantages of silicon to a broad range of highly integrated optical networking devices and provide performance advantages in wireless communications devices.
The transaction does not require regulatory approvals, and it is expected to be completed by the end of March, according to Conexant. The name of the new foundry company and members of the senior management team will be announced in the next 60 to 90 days, the company said.
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