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Editorial: Perspective on TriQuint's Sale of InP Opto Business to CyOptics
... The rumors were correct. TriQuint has just announced the sale of their InP-based optoelectronics units in Breinigsville, Pennsylvania in the USA to CyOptics of Lehigh Valley (Allentown), Pennsylvania for approximately $38 million, plus taking a minority share in CyOptics. Approximately 150 people in Pennsylvania and Mexico are involved in...
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April 18, 2005...Raytheon Company's Integrated Defense Systems (IDS) of Tweksbury,
Massachusetts USA and Cree Inc. of Durham, North Carolina USA and have confirmed
that they are the third and final team to be awarded contracts totaling $26.9
million over three years under the Defense Advanced Research Projects Agency
(DARPA) WideBandgap Semiconductor (WBS) Technology Initiative. According to
Raytheon, the news was originally announced Feb. 11th by the Defense Department
but only now appeared over the wires. CompoundSem News covered the original
two awards March 14th (ref: our editorial titled The
Long Awaited DARPA GaN Awards) when the TriQuint team, and then Northrop
Grumman team formally announced their awards.
The DARPA initiative aims to accelerate development of Gallium Nitride (GaN)
RF products for military and commercial applications. Like the other two teams,
the Raytheon-Cree effort will focus on X-band transmit/receive modules based
on GaN-on-SiC technology to improve efficiency of radar applications. The effort
is being likened to the early "MIMIC Program" (monolithic microwave-milimeterwave
ICs) that yielded over $500 million in revenue for the GaAs epitaxy field
and sparked the monolithic microwave integrated circuit (MMIC) industry.
Raytheon will be the primary contractor for their WBS team, and Cree will be
a subcontractor. Cree is expected to get $11 million of the $26.9 million. If
all options are exercised, the gains for both companies could total $56.9 million
with an estimated $24.5 million going to Cree. Cree has been developing GaN-on-silicon
carbide (SiC) RF devices since 1996. The semiconductor work will be conducted
at Raytheon RF components (Raytheon's MMIC foundry) in Andover, Massachusetts;
and Cree’s Durham, North Carolina Wide Bandgap MMIC foundry and Santa Barbara
Technology Center in Goleta, California. University of California, Santa Barbara,
as well as researchers at Georgia Institute of Technology and the University
of California, San Diego will be working with Cree and Raytheon on the project.
The award is being billed as The Raytheon-Cree team by Raytheon and the Cree-Raytheon
team by Cree. "The Raytheon-Cree team has the systems knowledge, technical
leadership, and semiconductor infrastructure to assure program success and transition
into systems," said Mark Russell, IDS's vice president of Engineering.
John Palmour, Cree's Executive Vice President, Advanced Devices, stated, "The
same improvements that will make GaN components viable for military systems
insertion we believe, will also make them viable for insertion into cellular
infrastructure, as well as other burgeoning wireless applications. Combining
our efforts with Raytheon is intended to accelerate the potential deployment
of this important enabling technology." Raytheon's program manager
for the WBGS-RF (Wide Bandgap Semiconductors for Radio Frequency) applications
program added, "Teaming with Cree is all about speed -- combining the
capabilities of the scientists at both companies will make this technology available
to the warfighter much sooner." Raytheon, with 2004 sales of $20.2
billion, is headquartered in Waltham, Massachusetts, now employs 80,000 people
worldwide. More details are in both Raytheon's
news release and in Cree's
news release which differ somewhat in content.
Emcore To Consolidate Solar Cell Production in Albuquerque Facility
CompoundSemi News StaffApril 18, 2005...Emcore Corporation, headquartered in Somerset, New Jersey USA, has announced
it will consolidate its production of solar cells to its Albuquerque, New Mexico
facility, and close down its City of Industry, California plant. To date, the
City of Industry facility has been receiving the solar panels from the Albuquerque
facility and assembling them into the final solar panel product. The California
facility has also housed clerical staff and engineering support. Emcore estimates
$3 million in annual costs savings will result from the consolidation, starting
in 2006. The City of Industry plant operations are expected to be discontinued
in the fourth quarter of 2005, and the facility is expected to close in the
first quarter of the fiscal year 2006.
The City of Industry facility was initially acquired by Emcore in March 2002
when they acquired the Applied Solar Division of Tecstar Inc., a well established
solar cell maker that entered into bankruptcy. Tecstar had a long history of
supplying solar cells for satellites, along with Emcore and Spectrolab, now
a part of Boeing. The addition of Tecstar to the Emcore team left, and still
leaves, only two suppliers of high efficiency radiation hard solar cells to
satellite makers. Emcore's cells have a beginning of life efficiency of 27.5%
and feature monolithic bypass diodes for shadow protection.
According to Emcore, about 50 employees will be affected by the closure of
the California facility. The key employees among the 50 will be moved to the
Albuquerque facility, which is a showplace state-of-the-art facility near Sandia
National Laboratory. Emcore's company sources say that their production capacity
will not decline and might even increase in the long run with the consolidation.
Work has started to establish the manufacturing process and space qualifications
for solar cell assemblies and solar panels built at the Albuquerque location.
This effort is projected to be completed by the end of the first quarter of
fiscal 2006. Emcore already has secured a solar panel program to be built at
the Albuquerque facility, with hardware scheduled for delivery to their customer
in the third fiscal quarter of 2006.
"Emcore will now have the capability to provide satellite manufacturers
a more cost-effective combination of world-renowned solar cell technology and
solar panel heritage. Emcore has supplied more than 400,000 solar cells, with
many already on orbit with proven space heritage. Satellite manufacturers and
solar array integrators will continue to be able to rely on a single supply
source that meets all of their satellite power needs," added Reuben
F. Richards, Jr., President and CEO of Emcore. The company will be collaborating
with Entech on two NASA projects. Emcore also plans to broaden their photovoltaic
portfolio with the consolidation savings to be competitive in terrestrial solar
cell market.
TriQuint Sells InP Optoelectronics Business to CyOptics for $32 Million
CompoundSemi News StaffApril 14, 2005...In the optical compenent game TriQuint Semiconductor is handing off the ball to CyOptics. TriQuint Semiconductor with headquarters in Hillsboro, Oregon USA is selling their Indium Phosphide optical business to CyOptic of Lehigh Valley, Pennsylvania including their manufacturing facilities in Breinigsville, Pennsylvania, and Matamoros, Mexico. TriQuint expects to receive $32 million in total from the sale with approximately $22 million of it in cash and a one-time gain of $7 to 8 million. After the completed sale, the operating expenses are projected to decrease by $1 to $2 million per quarter. TriQuint Optoelectronics, headquartered in Breinigsville, Pennsylvania, designs, develops and manufactures optoelectronic components, integrated optical modules, and InP chips for optical communication networks. Similarly, CyOptics designs, develops and manufactures optical engines for broadband metro and access communication networks. CyOptics says it plans to employ the vast majority of the 100 employees in TriQuint’s Pennsylvania facility and the 150 at the Matamoros, Mexico facility. TriQuint will retain its mainstream manufacturing facilities in both Hillsboro, Oregon and Richardson, Texas and its gallium arsenide (GaAs) optoelectronic product lines.
On March 11, 2005 TriQuint sold its 850,000 square feet optoelectronics facility and surrounding property in Breinigsville, Pennsylvania, to Anthem Partners, LLC, an affiliate of MRA Group of Plymouth Meeting, Pennsylvania. MRA plans to transform the existing facility into an advanced technology development and research center, featuring a combination of bio-medical engineering, high tech manufacturing, and a related education advancement and conference area. CyOptics will lease approximately 90,000 square feet of space in the facility once it has completed the purchase. Triquint anticipates the sale to CyOptics will close by the end of April 2005 and the sale to Anthem by the end of May 2005.
Ralph Quinsey, TriQuint president and CEO, stated, “The optoelectronics market will only support a few right sized and nimble players that are positioned for further investment in this market. Merging TriQuint’s optoelectronics business with the privately held CyOptics provides a more optimal operating environment and return on investment horizon for the business.” He added, "We now intend to turn our full attention to our growing businesses in the wireless handset, base station, defense, and wireless broadband access markets building on our portfolio of successful semiconductor and filter products.”Company News Release SET Inc. Introduces Product Coupling DUV LED with UV Transparent Fibers for Hard-To-Reach ApplicationsApril 15, 2005...Sensor Electronic Technologies Inc. (which would like to be know as SET Inc.) headquartered in Columbia, South Carolina, USA, has shipped their new product which couples deep-UV LEDs with UV-transparent optical fibers to reach areas which are relatively inaccessible to direct light sources. According to the company, use of these light sources range from variety of analytical and biomedical instrumentation to medical applications such as right-on-the-spot analysis, disinfection and curing of tissue and/or organs inside the human body. The company is calling this packaging solution to pair UV-transparent fibers to DUV LEDs, UVTOP. The company has already shipped UVTOP products to more than 70 customers worldwide.
According to the company, the peak emissions of UVTOP are as low as 255nm. The first order for the device with a peak emission of 258nm came from the Special Technologies Laboratory operated by Bechel Nevada for the USA Department of Energy. Support for the development of DUV LED technology at SET Inc. came from the Defense Advanced Research Projects Agency (program manager Dr. J. Carrano).
“We are pleased to announce expansion of our product portfolio to include DUV LED and optical fiber combination”, says Dr. Remis Gaska, President and CEO of SETI. “This enables us to provide new lighting solutions to our customers who need deep UV light sources for their applications.” Dr. Mark Morey from Special Technologies Laboratory said, "We are very excited that SETI has been able to push these materials and devices to produce usable light at such short wavelengths.” In addition to the deep-UV LED product, SET Inc. makes high-power transistors and RF components, sells epitaxial wafers, and grows crystals of gallium nitride (GaN), aluminum phosphide (AlP), and indium phosphide and their alloys.
Company News Release Fairchild Deploys Rossetanet Solution to Incease Ease of Doing Business With Distributors
CompoundSemi News StaffApril 14, 2005...Designing, prototyping, and ordering products requires information about which component product is best suited for the design requirements and sorting through a long list of components to find the right one. Fairchild Semiconductor, a dominant player in power electronics, has taken steps to streamline the price quoting, design win registration, and order management of their products between Fairchild and their distributors. The Rosettanet solution for design win registration will allow instantaneous information exchange with distributors through the RosettaNet B2B standard and it connects with Fairchild's FOCUS program. The solution tracks prototyping information and activity and provides Fairchild a better view of customer design requests and requirements. The company has deployed a Rosettanet-based solution and will demonstrate the e-business solution jointly with Wintech Microelectronics, a dominant IC distributor in Asia, at the RosettaNet Global Partner Conference in Beijing, China on April 21, 2005. Fairchild implemented the FOCUS design registration program in 2003 with key distributors such as Arrow Electronics.
Fairchild says it is committed to Rosettanet, a non-profit consortium of over 500 companies created to promote open e-business standards and services. "Our goal in delivering RosettaNet-based quoting is to increase distributor satisfaction in choosing Fairchild - in essence, to make it easier to do business with ussaid Eric Pannekeet, Fairchild's manager Corporate RosettaNet Development. "Fairchild is one of the first suppliers to implement this new solution globally across Asia, Europe and North America. RosettaNet-based solutions are a key part of our strategy to increase global demand for our industry-leading power products." Our news features are reported
by the CompoundSemi News staff writers.
For submissions or content suggestions, you can contact us using
editor -at - compoundsemi.com
For more information and to reserve promotion space contact
Info7 -at - compoundsemi.com
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The
McDonald Report
Commentary & Perspective...
Perspective on TriQuint's Sale of InP Opto Business to CyOpticsApril 14, 2005...The rumors were correct. TriQuint has
just announced
the sale of their InP-based optoelectronics units in Breinigsville, Pennsylvania
in the USA to CyOptics of Lehigh Valley
(Allentown), Pennsylvania for approximately $38 million, plus taking a minority
share in CyOptics. Approximately 150 people in Pennsylvania and Mexico are involved
in the transfer, most of whom will be picked up by CyOptics, which currently
is headquartered relatively near Breinigsville.
Step one of the divestiture of the Pennsylvania facility was in March of this
year when TriQuint entered into an agreement to sell its nearly 850,000 square
feet optoelectronics facility and surrounding property in Breinigsville to Anthem
Partners, LLC, an affiliate of MRA Group of Plymouth Meeting, Pennsylvania.
MRA intends to transform the existing facility into one of the Mid-Atlantic
region’s most advanced technology centers, featuring a combination of technology
research and development, bio-medical engineering, high tech manufacturing,
and a related education advancement and conference center. CyOptics will lease
approximately 90,000 square feet of space in this facility for its operations
once it has completed its purchase of the business from TriQuint, which is expected
to close by the end of April 2005. The sale to Anthem is expected to close by
the end of May 2005.
TriQuint originally purchased the Breinigsville operation from Agere in October
of 2002 for $40 million in cash (ref our Oct. 23, 2002 headline news and editorial
coverage.
Those who have been in this business awhile will remember that the Agere opto
operation was originally quite strong, but by the time Agere decided to finally
sell it off, it included about 80 development engineers, 20 marketing people,
and 50 process engineers, plus 150 assembly & test manufacturing and engineering
people in the Mexico facility. Considering Agere had basically driven their
opto business into the ground, TriQuint made a valiant effort to hold everyone
together and build the business back up. Alas... there's still simply not enough
InP opto business out there, and still too many players chasing a limited market.
The telecom bust remains a sad sector, with few likely to survive. With the
purchase by CyOptics of the TriQuint InP opto operation, CyOptics now stands
a decent chance of being one of the survivors.
The sale is good news to TriQuint fans. Consolidation is a way of life these
days, so this news was expected. What it means primarily to the compound semi
industry, is that TriQuint is doing what other wise companies are doing, and
getting back to their core strength, leaving the InP opto gamble to those who
can concentrate on just that. TriQuint's core strength is what it's always been...
According to TriQuint's President and CEO, Ralph Quinsey, "We now intend
to turn our full attention to our growing businesses in the wireless handset,
base station, defense and wireless broadband access markets building on our
portfolio of successful semiconductor and filter products.”
Ralph told analysts in a late Thursday afternoon conference call regarding
the sale (an online replay
of which is available), that the InP based and MOCVD platform-rich Breinigsville
plant was originally expected to yield in the neighborhood of $50-60 million
per year in revenue when they took over the business from Agere. That's before
they found out how badly Agere had run the business down. It only produced revenue
in the $30 million per year range. TriQuint's people have done their best to
build it back up. Privatizing the business and teaming it with CyOptics, which
has hung in the InP game admirably, gives Breinigsville it's best shot for continued
survival. "Only a few right sized nimble players will survive,"
Ralph predicted. TriQuint won't be completely out of the opto game either. It
will continue to support it's traditional GaAs opto drivers and TIA business
from TriQuint Texas in Richardson, Texas, deemed a relatively small operation.
This move is a sign of the times. The globalization of many businesses is one
factor. CyOptics was born and raised out of Bell Labs and is closely tied to
Israel. Whereas the USA continues to suffer in the telecom sector, action in
other countries, especially Asia and the Middle East, is doing much better.
And CyOptics has focused solely on InP since its inception. The company's device
manufacturing capability includes InP wafer fab, re-growth, and characterization.
They have a 7,000 sq. ft. wafer/chip fab in Yokneam Illit, Israel. In addition
to what they'll inherit at Breinigsville, they also have a 30,000 sq. ft. automated
assembly and test facility in nearby Allentown Pennsylvania in the USA... and
CyOptics is fully ISO9001:2000 certified. The technical founders of CyOptics
recently showed the good sense to hire themselves a good boss. Their new President/CEO
is Ed J. Coringrato (ref Mgt
Team).
The other sign of the times is another factor. For the next three years, for
sure, as long as the current USA administration stays on the warpath, the defense
business is one of the only sectors doing really well. And TriQuint's people
are old pros when it comes to defense applications. TriQuint Texas began as
a TI/Raytheon team on the famed MIMIC program, and it's in the leadership position
once again with the recent award as one of three primes to score the long awaited
DARPA GaN contracts. (Ref. our March 14th headline
news and editorial) which will put TriQuint on a lot of people's roadmaps
for GaN foundry work.
So I see this as an excellent move on many fronts. TriQuint is moving on and
will be helping pioneer one of my favorite compounds, GaN. And given the current
economic and political climate, worldwide, the privatizing of Breinigsville
and putting it back in the hands of the type people who originally created it,
Bell Labs and Lucent descendants, is a step in the right direction for InP.
Now... if the communications sector would just start to pick up a bit...!!!
If you have questions about the
solid state lighting and compound semiconductor industries or have news
or views to share, I'm Jo Ann McDonald, Editor of LIGHTimes and CompoundSemi News.
Feel free to contact me directly, anytime. 
My direct tel at the ranch is
+1-325-463-5345
From time to time Jo Ann may comment on companies in which she holds a
modest investment - be sure to read
her disclosure at some point in time... |
