Emcore's GaN spin-off raises $6 million fund
Emcore has spun off the development of its GaN power device technology in the form of a new company called Velox Semiconductor.
The firm, in which Emcore holds a 20% stake, has already raised $6 million from three venture capitalists "“ DCM-Doll Capital Management, SAS Investors and DFJ New England.
Velox has been set up to commercialize fast, high-voltage GaN diodes for high-power electrical supply applications, and is headed up by CEO Tom Hierl. Hierl previously set up Quantum Epitaxial Designs where he was CEO until the company's merger with UK-based epiwafer supplier IQE in 1999.
Emcore CTO Richard Stall is also on the Velox board, and the new company has five full-time employees.
The spin-off is also set to reduce Emcore's operating expenses by $1.2 million per year.
In its latest quarter, the Somerset, NJ, chip manufacturer reported a year-on-year revenue increase of 31% to $30.4 million, witnessing stronger demand across its fiber-optic, photovoltaics and electronic materials businesses.
Emcore made an operating loss of $4.9 million in the quarter, but saw its overall income boosted by a $13.2 million earn-out thanks to Veeco's sales of TurboDisc MOCVD equipment. Veeco acquired the TurboDisc division in 2003.
The net result was a profit of $7.6 million for the quarter. Emcore CEO Reuben Richards added that revenue in the current quarter would be relatively flat at $30 million-$32 million.
