11 June 2012

IQE completes acquisition of RFMD’s MBE epi manufacturing unit

Epiwafer foundry and substrate maker IQE plc of Cardiff, Wales, UK has completed its acquisition (announced on 5 June) of the entire in-house molecular beam epitaxy (MBE) epiwafer manufacturing unit of RF Micro Devices Inc of Greensboro, NC, USA, and has secured a long-term wafer supply agreement for the exclusive provision of all of RFMD’s MBE wafers and for provision of a majority of its metal-organic chemical vapor deposition (MOCVD) wafer requirements.

RFMD’s gallium arsenide (GaAs) products incorporate transistor layers grown on either an MBE or a MOCVD process. The firm outsources all MOCVD-based starting material and, with completion of the transfer, it will outsource MBE-based starting material.

The assets transferred to IQE include a fully fitted cleanroom of over 90,000ft2, 16 MBE manufacturing systems and equipment, all housed in a 135,000ft2 stand-alone building in Greensboro. The value of the transferred assets is about $27m. The local management and employees for the unit (consisting of 70 people) also transfer directly to IQE.
In exchange for the transfer of the assets, there is no upfront cash outlay (resulting in no IQE shareholder dilution). Instead, the parties have agreed to a seven-year wafer supply agreement, with a minimum purchase commitment of $55m over the first two years.

“This landmark deal secures IQE world-class epi-wafer production assets and staff, together with a long-term wafer supply agreement with one of the true global leaders in the wireless market,” says IQE’s president & CEO Dr Drew Nelson. “This deal further strengthens IQE's leadership position in the supply of wafers to the global wireless industry and enables IQE to rapidly build a global leadership position in the supply of wafers for the burgeoning CPV sector,” he adds.

IQE intends to use unallocated capacity from the transferred MBE facility to rapidly accelerate its wafer supply to meet the dramatically growing demand for concentrator photovoltaic (CPV) solar products in relation to its technology transfer and exclusive wafer supply agreement with Solar Junction, announced in February. This is expected to allow CPV wafer production with annual revenue capacity of up to $35m, without the need for significant up-front capital expenditures.

See related items:

IQE acquires RFMD’s MBE unit and secures seven-year wafer supply agreement

Tags: IQE RFMD MBE GaAs epiwafers

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