News Article

Cree Set To Buy Out Intrinsic For $46 Million

Consolidation hits the SiC materials industry, with Cree, the sector's dominant power, set to buy zero-defect substrate and epiwafer supplier Intrinsic Semiconductor.

Cree is to acquire fellow SiC substrate developer Intrinsic Semiconductor in a deal valued at $46 million.

The Durham, NC, chipmaker will stump up $43.5 million in cash, with the remaining $2.5 million to be paid through the assumption of outstanding Instrinsic stock options.

Although both companies manufacture and sell SiC substrates, Intrinsic has pioneered the development of so-called "zero-micropipe" (ZMP) material, a high-performance product line that has enabled the development of advanced SiC microelectronics.

Cree says that the acquisition will combine that expertise with its own volume manufacturing experience, stimulating the development of large-diameter SiC wafers beyond the 3-inch material that is starting to become widely used today, to 4-inch and possibly 6-inch production.

Cree itself has almost completed the conversion of its LED production lines to 3-inch material, while RF Micro Devices will manufacture its new range of GaN-based products on wafers of the same size.

"These substrates should not only support our cost roadmap for LEDs but, more importantly, they should also enable us to more rapidly commercialize higher-power devices for motor-control applications and hybrid [electric] vehicles," said Cree chief Chuck Swoboda.

Cengiz Balkas, the man who has led Intrinsic up until now, added that the combination of Cree and Intrinsic would yield a unique opportunity to make a new generation of cost-effective SiC devices earlier than had previously been expected.

Intrinsic, which is based in Dulles, VA, recently began sampling 4-inch SiC substrates and has device prototyping capability. Like Cree, the company uses a physical vapor transport method to produce its substrates.

Government support for SiC development, particularly in the US, had led to a large number of SiC material vendors in what is still a very small market. This had led to some speculation that there would be a move to consolidate the supplier base, as predicted in Compound Semiconductor magazine earlier this year (see related feature article).

The acquisition is expected to be finalized within the next month.

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