Cypress sells SVTC R&D fab for $53M
By Colleen Taylor -- EDN, January 30, 2007
In the industry's latest private equity buy, Cypress Semiconductor Corp. today announced an agreement to sell its Silicon Valley Technology Center (SVTC) business unit to private equity firms Oak Hill Capital Partners and Tallwood Venture Capital for approximately $53 million in cash.
SVTC is a shared R&D environment that offers access to a semiconductor toolset in a manufacturing-like fab environment. The business unit focuses on use of direct open-access protocols with equipment as advanced set as the ITRS's 65nm roadmap. As part of the transaction, Cypress will transfer substantially all equipment, process technologies and personnel associated with its SVTC business to the buyer. Cypress, which will remain an SVTC customer, said the transaction is expected to close by early March.
"With a recent shift in focus to a new mix of programmable products and solutions, Cypress now has very few products requiring 'bleeding-edge' technology, leading us to conclude that we can do R&D more cost-effectively as an SVTC customer than as an owner," T.J. Rodgers, president and CEO of Cypress, said in a statement.
The SVTC sale is just the latest of a bevy of business sales to private equity firms seen in the industry in recent months. In September, Royal Philips Electronics completed the $10.68 billion sale of it semiconductor business to a private equity consortium, which renamed the company NXP Semiconductor. That same month, Freescale Semiconductor entered into a definitive agreement to be acquired by a private equity consortium for $17.6 billion.
Meanwhile, Cypress itself has been rumored as the next company up for a private equity buyout. The company has been targeted by an activist hedge fund calling for it to undergo a large-scale reorganization and split from its SunPower subsidiary.
For more on what’s happening with private equity, see Electronic News’ Special Report: Private equity and the new exit strategies .
