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Update on Oxford Instruments Collaboration With University of ManchesterJune 10, 2005...The School of Electrical and Electronic Engineering at the University of Manchester, says it houses the most advanced compound semiconductor material growth system in the UK. Oxford Instruments has donated the V100 molecular beam epitaxy (MBE) system as part of the facility collaboration with the University of Manchester. The state-of-the-art V100 system can grow on 6 in. substrates. It boasts what the company says is one of the highest process stabilities in the world while providing increased uniformity, greater capacity, and greater throughput than most systems. The system adds to the facility’s existing V90H reactor. Oxford Instruments has agreed to invest £240,000 over a three-year period for the ongoing costs of the laboratory and its equipment. Oxford Instruments has hired Dr. Colin Mitchell as their research associate at the laboratory. “This facility is regarded as one of the best in the country for research and we provide material for research institutes and industry worldwide. We can provide a full process from initial design, materials growth and characterization, all the way to device fabrication and testing,” said Dr. Mitchell. “This enables us to provide a unique service to industry, investigating growth solutions for their devices, and using our experience and knowledge to demonstrate how to fully utilize the impressive capabilities of Oxford Instruments’ growth systems.” The laboratory currently uses the V100 to produce high-speed low-noise transistors and develop Quantum Dot and Quantum Cascade lasers, in addition to photodetectors for infrared applications. The facility has also ‘spun-off’ an ISO9001:2000 certified company (ICS Ltd) for the commercial supply of material grown on the V90H. Material supplied from ICS is used in the ‘Adaptive Cruise Control’ car-radar systems fitted to BMW and Jaguar cars. One goal of the collaboration, which is in its twelfth year, is to research and develop materials, devices and subsystems facilitating the next generation of integrated communication components. The ongoing collaboration is headed by Professor Mohamed Missous, chair of Semiconductor Materials and Devices at the University of Manchester. Professor Missous commented, “We are pleased to strengthen our relationship with Oxford Instruments ever further.” He added, “Together we can address cutting-edge applications and continue to push the boundaries in compound semiconductors.” Cree Awarded Contract for High Voltage Power Management Systems and Debuts Two New LED ChipsJune 9, 2005...The United States Office of Naval Intelligence has awarded Cree Inc. a $12 million dollar, 18-month contract to develop silicon carbide (SiC)-based high voltage, power management systems. The goal of this Phase II contract in the development initiative would be to reduce the size and weight of the high power electronic devices and power management equipment aboard aircraft carriers.
Toshiba of Japan Announces HD-DVD Recorder |
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Commentary & Perspective...
Who Might Buy Agilent's SPG Unit (which co-owns Lumileds), and Why?June 14, 2005...Normally we avoid writing about rumors, but this one's irresistible. Some highly credible news sources, EE Times being the one closest to our business, have reported that Agilent Technologies is actively shopping for a buyer of its Semiconductor Products Group (SPG), which includes the LED business that went to Agilent when it spun off from Hewlett Packard, and... more importantly to our industry, Lumileds Lighting, the JV co-owned by Agilent and Philips. Agilent, HP and Lumileds have their international roots firmly planted in the USA, and all remain headquartered in the famed Silicon Valley in California. Philips is based in the Netherlands. Now the speculation fun begins. Will Lumileds indeed be part of the deal? Who will be the buyer (or buyers)? And how would such a shift alter the existing LED manufacturing landscape? Agilent has evidently recruited Goldman Sachs to handle the sale of the group and the speculative pricetag could be in the neighborhood of $1.5 billion to $2.0 billion, according to The Wall Street Journal and Reuters. EE Times did the math for us and noted that, last year, Agilent's SPG unit "contributed $2 billion to Agilent's $7 billion in revenue. Semiconductor orders were $435 million during the first quarter of 2005, down 26 percent from one year ago but up 7 percent sequentially. First-quarter chip revenue, at $450 million, was 5 percent below last year and down 9 percent sequentially. Segment profit, at $27 million, was $33 million below last year's quarter on a $24 million drop in revenue. Sequentially, profit was $19 million higher, despite a $42 million drop in revenue." To that we can add that the Lumileds JV, which is physically housed in Agilent's SPG LED facility in San Jose, California yielded $280 million in revenue for FY'04. Philips' executive VP and CEO of the company's solid state lighting unit, Peter van Strijp, revealed in late December that Lumileds' revenues represented 43% annual growth, and that Philip's net income amounted to $62 million. These figures were reported by Philips in December of 2004, and covered as exclusive headline news in these pages. (Ref: Dec. 23, 2004 Philips Reports Lumileds' Impressive Financial Performance for FY '04 which includes links to the presentations). Prior to that, Lumileds' revenues had never been publicly disclosed. Since the JV is owned 50-50 by Agilent and Philips, one could surmise that Agilent scored $62 million net income from last year and that this is included in the $280 million reported revenue. At the size of the $2.0 billion revenue that the SPG group adds, $62 million starts to look like loose change. Current metrics are what matter. Agilent's SPG unit is down in revenue by $12 million and no company can sustain a loss for long in these hard times. So selling off the loser could make sense to the hard of heart. But... the Lumileds JV appears to be a winner within SPG, producing good bucks for its parents. Agilent has stayed relatively quiet all along about how well their high brightness, high power LED offspring is doing. At the same time, they've announced various steps that moves Agilent's conventional LED manufacturing prowess into continually closer alliance with Lumileds' product line, which shouldn't be hard, given they're in the same building. It seems to me that the LED business, combining Agilent's conventional LEDs and Lumiled's HB/HP LEDs, would go for a hefty price to someone interested in being a massive force in LED manufacturing. If you have a billion or so to sink into it, you might have something. Keep in mind that when your JV is a 50-50 partnership and one of the parents wants to bail out and run with the cash, the other parent has a big say so about what happens to the kid. Philips may opt for full custody. But they may not want all of Agilent's SPG product lines. One of the more interesting lines within SPG is Envisium, which is the brand name for a line of mid-power LEDs co-developed by Agilent and Lumileds. SPG also sells dot matrix displays, light bars, segmented and smart displays, surface mount LEDs and through hole LEDs, so a breakup and piece meal sell off might be the course Agilent takes. When speculating about what Philips might do about Lumileds, its important to remember that Philips is one of a small handful of true world-class lighting companies. They're holding 50% ownership of one of the brightest and best of the advanced (versus conventional) LED makers, including all colors, which includes some of the best of class white LEDs. If you're starting a betting pool around the office, it might not hurt to first take a site-seeing trip around Lumileds' website to view for yourself what Lumileds brings to the Agilent SPG speculation party. Also, beyond the products lines, Lumileds has some wonderful people running the shop, led by Mike Holt and backed by an extremely talented technical staff. They're all rather HP-like (hip and patient) in the fine tradition of that once great Silicon Valley leader. And if Agilent sold its share of Lumileds to anyone, they'd have to factor in that the man who conceived of Lumileds in the first place was George Craford, who continues to serve as CTO. The inclusion of George in a sale would require declaring him a national treasure. Then there are all those Asian companies with deep pockets to consider as potential buyers. Asians already hold most of America's debt, so why not buy one of America's brightest hopes? I'd think there are Japanese, Korean and Chinese companies just waiting for a chance like this, providing they can afford the tag. Agilent would be foolish not to get the most money they can for their share of Lumileds. I'd think the easiest course is for Agilent to simply sell their interest in Lumileds to Philips. People inside our business have long speculated that Lumileds would go to Philips if there was a divorce, or if one of the spouses died. And everyone knows the Netherlands (which is Philips' home base) owns most of the world, but simply doesn't brag about the fact. The Netherlands has been a well-oiled and well-heeled country for a long, long time and is very good at understating their ownership of enterprises. They've been at this ownership/control thing even longer than England. Never underestimate the power of a strong European company if they have their hearts and minds set on owning something. My personal choice, of course, would be to see Lumileds spun off into independent status. Ideally, it would go public on the American Nasdaq stock exchange. Boy, that'd be one I'd want to have shares in. An IPO like that would be our industry's version of Google when it went public. Opening at $100/share, Google shares are now selling for around $300/share. Google proved it actually isn't as bad an economic climate to go for an IPO as many people may think. Lumiled's LED manufacturing prowess is legendary and its people are among the best. If it did go public, it could be a very successful IPO. I sincerely hope Philips and Agilent think about that when negotiations begin... should the rumors prove true. But like all rumors, this one may not pan out. We'll see. If true, a sale would change the LED landscape, depending on who ends up owning Agilent's LED business and Lumileds, and whether or not the Lumileds JV is part of the deal. Personally, I think there'd be tremendous strength in packaging Agilent's LED business and Lumileds Lighting together as a stand-alone company, and blowing the doors off the Nasdaq in an IPO. Whether or not the rumors prove true, I think I'll start comparing notes with all the old timers from HP, like Roland Haitz who retired as R&D Manager for the Agilent components group, and goes way back to the early days of HP LEDs. And I'll start digging into my archives (which are bursting with legend and fact from the old days, along with lots of dust) and enlist the aid of Strategies Unlimited. Together, Bob Steele and I know all the great stories. Hey... maybe the price tag for SPG and 50% of Lumileds will go up when potential buyers, brokers and sellers calling the shots learn what's really at stake? If you have news or
views to share about the compound semiconductor, LED or solid
state lighting industries |
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