News Article

IR Sues Former CEO And Aixtron Over GaN

Son of power semiconductor firm's founder accused of forming an "undercover company" to steal the findings of its $60 million research project.

International Rectifier (IR) has accused its former CEO Alex Lidow of an “elaborate fraudulent scheme to rob" the power electronics giant of its emerging GaN-on-silicon technology.

On September 8, 2008, IR filed a case in the Central District of California alleging that Lidow set up an undercover company to execute the plan.

The suit names Lidow and six fellow former IR employees that assisted in establishing that company, now known as Efficient Power Conversion Corporation (EPCC).

It also accuses companies that the EPCC team has interacted with, including MOCVD equipment vendor Aixtron, Hermes-Epitek, and silicon wafer supplier Episil Technologies.

A hearing is set for February 2 where Aixtron and EPCC will argue in favor of dismissing the case.

Lidow was chief executive officer of International Rectifier from 1999 to October 2007, during which time he oversaw what IR claims to have been a $60 million investment into GaN research.

“By engaging in their unlawful conduct, defendants caused IR to lose much of the value of its multi-million dollar research expenditures on GaN-related projects and personnel," IR s court documents state.

His former employer credits Lidow with recognizing the potential of GaN early on. In 2003, Lidow himself expressly directed the purchase of a company called GaNRose from fellow defendant Robert Beach for more than $800,000.

Beach then signed a contract that required him to “devote all of his efforts to IR", but allegedly established semiconductor processing service provider GNOEM in the same year.

GNOEM s website says that it is “working towards solutions that utilize the advantages of Gallium Nitride". IR says that Beach was one of its first employees that Lidow approached about his secret plan.

In March 2006 IR purchased a Minnesota-based epitaxial growth group from APA Enterprises that was researching GaN technology. The team, led by Ron Birkhahn, began using a Veeco D180 MOCVD reactor before moving to an Aixtron G4 tool.

Allegedly Lidow approached Birkhahn to leave IR and join EPCC in November 2007, but Birkhahn declined and Lidow instead recruited his colleague Guangyuang Zhao.

Undercover company
IR had kept the disputed GaN-on-silicon research a closely guarded secret, and the company only revealed details of the work shortly before demonstrating prototype devices in November 2008 (see related story).

The suit says that Lidow kept the technology under wraps to stop competitors knowing that IR was working on GaN, and prevented a public disclosure in summer 2007.

It then claims that Lidow started enrolling colleagues at IR, plus founder of Hermes-Epitek and Episil Archie Hwang, to his plan to form EPCC in “early fall" 2007.

Beginning in late 2007, IR says EPCC tried to recruit its business collaborators, including etch tool supplier Lam Research Corporation. Lidow and Beach allegedly then made several trips to meet Episil and Hermes-Epitek in Taiwan.

Aixtron s involvement comes through a meeting Zhao is supposed to have held with its employee Yulmas Dimke at the company s Aachen premises in June 2008. Dimke had previously worked closely with the Minnesota GaN epitaxy group to help install the G4 reactor and perform trial runs.

“[Dimke] had access to virtually all of IR's GaN-related information," the court documents claim. “The defendants at EPCC sought out and utilized Aixtron, just as IR does and did for its GaN effort."

Alexander Lidow is the son of Eric Lidow, who set up IR in 1947. Alex Lidow began working at IR in 1977 and became CEO in 1999. This is not the first controversy to surround Lidow s tenure at the helm of the firm - his resignation in late 2007 followed accounting irregularities at one of the company s foreign subsidiaries.

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