CompoundSemi Online - The Original Compound Semiconductor Industry Newspaper

November 2, 2003...The following editorial first ran Oct. 19th. We rerun the bulk of it by popular demand as the pace of acquisitions continues to increase. Stay tuned for an updated editorial on this topic soon. As you can still see in our ongoing news coverage (the latest being Bookham getting the nod from the USA feds to go ahead with its purchase of New Focus), the pace of compound semi acquisitions continues. Emcore purchased Molex' 10 Gig line pushing Emcore even more towards the transceiver limelight. Oxford Instruments acquired VG Semicon from Thermo for a very modest amount, Anadigics acquired the Tavanza line from Celeritek, and Mykrolis acquired Aeronex. From all levels of the foodchain, people continue to get traded or let go, those who are retained start changing their business cards, titles and affiliations, but business tends to go on as usual, with the same people doing the same work... or more due to understaffing. Only Oxford and VG are willing to publicize pricetags, and not doing so is usually because the company was acquired for considerably under its real value. Trouble is, there's still not much market, so some equate that with lesser value when often that's simply not the case.

This doesn't end the latest wave of acquisitions. Not by a long shot. There are some major rumors working their way around our close-knit international community of more to come, some taking the industry out of a pioneering era and into the unknown. Wise companies don't officially respond to rumors, and if they're publicly held companies, even more reason to stay silent until something's finalized. That being the case, nothing will be officially announced over this site until it's just that. Official. But who's buying what from whom isn't the most important thing to this editor anyway. What happens to the people inside the companies involved after an acquisition, and to the industry as a whole, is what's important. When acquisition fever strikes these days, it usually results in taking down way too many individuals.

There will be a few hero companies in this emerging "new era" in the compound semi industry. They'll be the companies that take very good care of their people, plan their strategies sensibly and with sensitivity and knowledge of how very special and unusual the compound semi industry really is, and how important their contributions to advanced technology. They'll be the ones we champion. News that Anadigics will keep the Tavanza unit located in SiValley is a good sign, for example. When Emcore rescued Ortel from Agere, and when TriQuint incorporated so much of Agere even after the business had been drastically run down, those joining Emcore and TriQuint openly expressed that their new parents brought new hope, appreciation and a sense of returing home. Remember when Sensors Unlimited bought themselves back from Finisar? The classic "restart" provided a new role model for others frustrated with the downturn but optomistic about the future. That was especially good news and the kind of "new era" we hope will emerge from this latest round of buying and selling people, their intelligence, and their creations.

To be in on the latest at a depth of knowledge needed to truly understand this field,, you really should attend this year's Compound Semi Outlook conference in Dallas, Dec. 15-17. The Annual Outlook, now in its 9th year, is where companies notoriously gather for a number of reasons. Buying and selling one another is one. Emcore, for example, bought MODE at a CS Outlook and that acquisition changed Emcore forever by taking it out of being exclusively an MOCVD tool supplier. From then on, Emcore continued to strengthen its upward migration and broaden its component and sub-system offerings. Veeco is another example of broadening and strengthening, but it tends to firmly focus on the measurement and process equipment side of the business and with deep roots in silicon. Veeco's major move into the compound semi side of the industry was when the acquired Applied Epi (originally "EPI-MBE") in Minnesota, a noted supplier of MBE epitaxy tools. MBE and MOCVD tend to be "sister technologies" and sometimes those sisters compete. While most volume manufacturers go the MOCVD route (R&D often prefering MBE), some very key manufacturers, like RF Micro Devices, prefer MBE. It used to be that Riber was the major supplier of MBE tools, then VG Semicon started to move ahead as TRW and RFMD initially expanded. But now, with the assimilation of Applied Epi finally complete and VG ownership popping back and forth over The Pond as it changed from independent to Thermo to Oxford, the informal, very unofficial estimate is that Veeco now holds the #1 slot in market share. So what happens after an acquistion tends to be very important. It's all in how well the new parent treats its newest family member.

Veeco has long leveraged an acquisition strategy (see litany on Veeco website) and has posted its interesting history. It looks at a lot of companies, but only buys the cream of the crop. Veeco's Dave Reamer is co-chair of CS Outlook and along with co-chair Ralph Quinsey, President and CEO of TriQuint, Dave is helping us enormously to put together a truly dynamic program, dynamic in that things are changing quickly this autumn as the industry recovers and rebuilds... ergo the theme of the conference. For those of you who don't know him (and just about everyone does), you'll see on Veeco's corporate management roster that David Reamer is now Veeco's corporate VP of Strategic Marketing and Business Development, and coordinates and directs all marketing and business development activities for Veeco. He originally hails from the Applied Epi operation in Minnesota. He's also a really nice guy. Come meet Dave, key people from TriQuint, Cree, Emcore, Anadigics... virtually all the shakers and movers in this business...at CS Outlook.

So, the reason senior managers, strategist, tacticians and analyst come to the annual outlook is to get to know each other better. In some cases, to look each other squarely in the eye, to shake hands and size each other up, up close and personal. Some come to find a new job, to scout for the right manager to fill a key slot, and to buy and sell each others' companies. They come to evaluate whom to do business with, and why, and whom to target as a competitor. Those who come thinking they can steal each others ideas, customers, and people are all ears, poker faces and have x-ray vision. Obviously, that's over the top... but if I were a cartoonist I'd have a hay day. Seriously... they do come to meet each other, and watch each other, and to get to know one another better. And while they're at it, they usually have a really good time doing so. This year, more than ever, with times still so tough, my bet is that the commonalties you'll hear aired on the panels and at the podium at CS Outlook will end up binding the compound semi community more closely than ever. That's what our "Rebuild and Recovery" theme is all about. We're all in this together.

Anadigics Acquires Celeritek's Tavanza Handset Power Amp Business

Cree Continues Undistracted to Outperform Itself

Mykrolis Expands Gas Purification Capability with Acquisition of Aeronex

RF Micro Ships 300 Millionth Power Amp Module

Oxford Instruments Acquires Thermo VG Semicon for Max $1.3 Million

Osram Welcomes White LED Licensees and Expands OLED Teaming

Acquisition Fever Mounts