Caracal Seeks Buyer As Navy Contract Dries Up
Caracal, the Pittsburgh-based manufacturer of SiC substrates and epiwafers, has filed for bankruptcy.
The company lost out to rival suppliers when the Office for Naval Research (ONR) slashed the overall spend on SiC development in its latest round of research funding. However, it is confident of finding a buyer to take on its advanced technology and maintain a semiconductor manufacturing presence at its Ford City, PA, location.
CEO Andy Chomos told compoundsemiconductor.net that Caracal had filed for "Chapter 7" bankruptcy on April 21.
This means that Caracal wants to carry on as a producer of SiC wafers, but that it intends to trade under a different owner.
Having already held talks with a number of prospective buyers, Chomos said he was "very optimistic" that a deal with a larger semiconductor materials or device company would be struck.
"We are hoping for some kind of vertical integration," said the CEO. "My vision is that [Caracal] will become a small research and development division within a larger semiconductor device manufacturer."
Certainly, it appears that a number of device manufacturers have been keen to try out Caracal material. Chomos said that 12 commercial customers had been using Caracal s SiC wafers in research and development, mostly focused on hybrid electric vehicle applications and high-brightness LED projects. And the firm is acknowledged to have a talented technological team and some useful intellectual property (see related stories).
But the main problem faced by any prospective buyer would be the company s debt position.
Caracal owes $1.6 million on its wafer manufacturing equipment, while the company is also tied to a ten-year lease at its Ford City headquarters, where it has been seen as a key tenant in the region s plan to revitalize its local economy.
Having only moved to the site in 2005, there are still seven years left on that lease, with the annual rent costing some $240,000.
Nevertheless, Chomos thinks that the combination of Caracal s intellectual property and the emergence of the local region as a high-tech "corridor" (thanks largely to Penn State University s electro-optics expertise) will be enough to ensure the future of Caracal s technology, if not necessarily its current guise.
For now, Caracal is an ongoing concern, although Chomos has trimmed the company workforce from ten people to just seven technologists since filing for bankruptcy.
But if no buyer is forthcoming, the firm named for the medium-sized hunting cat may become the first victim of the US Department of Defense s decision to scale back its efforts on SiC semiconductors.