Buyer of IDT plant likely to keep making chips there

Portland Business Journal - by Erik Siemers
Date: Monday, August 29, 2011, 2:26pm PDT

One chip-maker was looking to go fab-less. Another was looking for a fab.

And now, it seems, the two have met in Hillsboro at the corner of Evergreen and Brookwood.

A happy ending? It’s looking that way, but it’s best not to get ahead of ourselves.

Sunnyvale, Calif.-based Alpha and Omega Semiconductor Ltd. (NASDAQ: AOSL) on Saturday said that by Nov. 15 it intends to buy the Hillsboro semiconductor fabrication plant owned by San Jose, Calif.-based Integrated Device Technologies Inc. (NASDAQ: IDTI) for $26 million.

Assuming the deal happens — and let’s be clear, declaring one’s intent to buy is still a step or two away from actually buying the plant — this is undoubtedly good news for Hillsboro.

IDT announced in August 2009 that it planned to outsource its manufacturing to a company in Taiwan, sparking fears that the 16-year-old, 25-acre campus where it once employed around 400 workers would shutter.

ATREG Inc., the Seattle-based semiconductor industry advisory group hired to market the plant, told the Business Journal in March that it was negotiating with a potential buyer.

It now appears that the suitor was Alpha and Omega, a maker of a broad range of “power semiconductors” that last year grew sales 6.3 percent to $96.8 million.

Officials for the company haven’t returned calls for comment, but others involved in the deal are confident that Alpha and Omega, or AOS, will continue to keep the plant operating at or near capacity.

“It only makes sense if they were going to use the vast majority of the capacity,” said Barney Silver, a senior vice president and principal at ATREG. “My expectation, and IDT’s expectation, is they would continue to use it as it has been used.”

Graham Robertson, IDT’s vice president of corporate marketing, described two companies on divergent paths.

IDT is shifting from having its own factories, to an intermediary step he called “fab-lite,” to completely fab-less.

Alpha and Omega, meanwhile, is currently fab-less on its way to “fab-lite.”
IDT has had a foundry agreement with AOS where it served as a contract manufacturer, making certain AOS products out of the Hillsboro fab.

“When you make products for somebody, you give me your secret recipe and my chefs make your recipe,” Robertson said. “They’ve seen us be able to make their product out of our fab and recreate the recipe.”

The foundry agreement came with an option to buy that can be exercised between Sept. 1 and Nov. 15., and it’s clear that AOS officials liked what they saw.

Though it’s unclear how many jobs might transfer under such a deal — IDT currently employs 275 in Hillsboro — AOS is confident that production can be ramped up quickly.

In a news release, Chief Financial Officer Ephraim Kwok said the ramp-up period should be short since IDT is already making a low volume of the company’s wafers.

CEO Mike Chang said in acquiring a fab of their own, AOS will be able to more quickly roll-out high-value product and respond to customer demands.
“We believe that this acquisition will allow us to accelerate revenue growth and increase gross margin significantly through faster introduction of high-value products and expansion into new serviceable available markets,” Chang said in a news release.

India Infoline News Service / 16:07 , Jun 02, 2011
The transaction includes a 300mm production fab, a 300mm R&D fab, manufacturing equipment, as well as related support and administrative facilities.
ATREG, Inc. (Advanced Technology Resource Group), a Seattle-based global advisory firm to the semiconductor industry, announced today that it acted as the financial advisor to insolvency administrator Dr. Michael Jaffé on behalf of Qimonda Dresden GmbH & Co. oHG throughout the successful sale of all Qimonda Dresden’s remaining assets. Infineon Technologies AG (ticker symbol: IFX), a leading provider of semiconductor and system solutions addressing energy efficiency, mobility, and security headquartered in Munich, Germany, purchased these assets for €100,600,000. The transaction includes a 300mm production fab, a 300mm R&D fab, manufacturing equipment, as well as related support and administrative facilities.

“We are very pleased with the outcome of this transaction,” explains Barney Silver, senior vice president and principal at ATREG. “By working very closely with both the Qimonda Dresden and the insolvency administrator’s team, we ensured the timely execution of this sale, and reached a positive outcome for all stakeholders concerned.”

Renesas sells U.S. fab to Telefunken

SAN JOSE, Calif. – Japan’s Renesas Electronics Corp. will sell its semiconductor wafer fabrication facility in Roseville, Calif. to Germany’s Telefunken Semiconductors International LLC for approximately $53 million.

Telefunken intends to utilize the 200-mm fab in Roseville to manufacture its own analog/mixed-signal, high-voltage products and the products for its strategic foundry partners. 

The company also will enter into a supply agreement with Renesas Electronics for manufacturing services at the Roseville factory. Under this agreement, it will focus on Renesas Electronics’ current customers without interruption.
  
The Roseville fab was once owned by NEC Electronics. Renesas assumed control of the fab when it merged with NEC Electronics.  

For the most part, Telefunken was an analog and mixed-signal foundry. Last year, it announced a re-entry into merchant integrated circuits market with a focus on power management and high performance Interface. The newly released products are fabricated at Telefunken’s specialty analog fabrication facility in Heilbronn Germany. Proprietary processes such as silicon-on-insulator, a 700 volt high-voltage process and a high-speed silicon-germanium process enable the new devices to meet the highest performance standards at the lowest power consumption.

As reported, Renesas is moving to cut costs. As part of the strategies outlined through its 100-Day Project announced on July 29, 2010, Renesas Electronics ‘’has been considering and implementing various measures to improve manufacturing efficiency by promoting larger wafers, finer process node, and production concentration.’

Renesas planned to cut nearly 10 percent of its  workforce, or about 4,000 jobs, by the end of 2010. It is also moving towards a fab-lite strategy. It will use foundries for devices at 28-nm and below. And it will no longer invest in new fabs. 

It also spun out its mobile chip group. More recently, the company has been hit hard by the earthquake in Japan.   

Anthony Klan, 12/22/2010, Wall Street Journal

In March, demolition workers will begin tearing apart a one-million-square-foot memory-chip factory that, despite being built more than a dozen years ago and owned at different times by two of the world's biggest electronics manufacturers, has never produced a single item.

The once state-of-the-art semiconductor plant at Dunfermline, Scotland, about 20 miles northwest of Edinburgh, symbolizes the struggle the region has had in its attempts to attract high-tech manufacturers to its shores, and how hard its commercial-property sector has been hit by the global economic downturn.

The property is now embarking on a new life. It was purchased this month by Shepherd Offshore Services Ltd., a Newcastle development and logistics company owned by former Newcastle United soccer club Chairman Freddy Shepherd.

Shepherd officials didn't return calls seeking comment. But people familiar with the property said the company paid about £10 million ($15.5 million) for it.

After the demolition, the new owner likely will build a wind-turbine factory on the site, and develop and sell of some of the land for commercial, retail and residential uses, according to the Fife Council, a county governing body.

"Shepherd tells us the site will yield about 600 jobs eventually, but we are going to have to be much more conservative over this one," said Fife Councilor Tony Martin, "We have to realize this will take time; it isn't a quick fix."

The Dunfermline semiconductor plant is just one of a long list of high-tech failures in Scotland, as companies shelve plans, shut their doors or wind down in the face of far more favorable manufacturing conditions in emerging economies such as China and India.

In 2001, computer company Compaq Computer Corp. announced 700 job losses from its Erskine plant, with that work moved to a Taiwanese company operating in the Czech Republic. In 2005, Hewlett-Packard Co. announced plans to ax 85 jobs at a plant in Erskine, and in January 2007 electronics group Simclar shut plants at Irvine and Kilwinning, with a loss of about 420 jobs.

The 150-acre Dunfermline site, in the county of Fife near the burial place of Scottish king Robert the Bruce, has had a long history of unmet promises.

The Dunfermline site was first developed for industrial use by Korea's Hyundai Electronics Industries Co., which announced plans in 1996 to invest $1.4 billion to create a semiconductor plant that would employ 2,000 people. It was heralded as a panacea to unemployment problems in the region.

But in April 1998, amid the Asian financial crisis, Hyundai mothballed the project during its final stages of construction. The company said it would resume work once Korea emerged from the worst of the economic slump.

Instead, the plant was sold three years later to Motorola Inc., which planned to manufacture memory chips for mobile phones. But that never happened because of competition in Asia and the slump in the price of chips. When Motorola spun off its Freescale Semiconductor unit in 2004, the Dunfermline factory went with it.

Freescale, which was taken private in 2006 in a $17.6 billion leveraged buyout by a consortium led by Blackstone Group LP, put the property on the block in 2007. But then the global financial crisis hit, leaving the property on the market for three years without a buyer.

Freescale at one point was close to selling the site to California renewable-energy company Zoom Diversified Inc. But those talks collapsed.

Shepherd Offshore, the new owner, plans to demolish almost all of the never-used facility, according to Doug Barrett, principal with Advanced Technology Resource Group, the U.S. advisory firm that co-brokered the deal with Colliers International.

Iain Davidson, a Colliers director in Glasgow, said demand for industrial and commercial property in Scotland has fallen with the downturn, cutting values to about 40% below 2006 levels. "It's not going to be a bounce, it will be a slow recovery," he said.

Industrial parcels in Glasgow bigger than 100,000 square feet are now selling for about £125,000 an acre, down from £250,000 an acre in 2007, according to Colliers.

In the county of Fife, prime rents for industrial buildings of more than 100,000 square feet have more than halved from £4.50 a square foot in 2007 to £2 in 2010.

Colin Holland, 12/13/2010, EE Times

by Dylan McGrath 9/14/2010, EE Times

SAN FRANCISCO—Commercial real estate vendor Colliers International announced Tuesday (Sept. 14) that it has spun off its advanced technology manufacturing services division into a separate, independent advisory firm. 

The group, Advanced Technology Resource Group (ATREG), has been involved in a number of transactions revolving around the sale of semiconductor wafer fabs and production equipment since its formation in the late 1990s. 

As a standalone company, ATREG will continue to provide semiconductor and advanced technology manufacturing clients with services including selling entire businesses or business units, process and product IP, and strategic consulting, according to ATREG executives. Meanwhile, Colliers will operate as ATREG’s preferred real estate provider under the terms of a strategic agreement between the now separate firms, ATREG said.

According to Stephen Rothrock, ATREG's managing principal, the group was split out from Colliers, the world's third largest commercial real estate services firm, because the nature of its business involves a great deal more than real estate transactions. When ATREG is retained to sell a wafer fab, Rothrock said, its focus is not only the physical building but also the employees, tools, business processes, IP and products, he said. 

"The real key thing is that what we focus more than anything on complex transactions," Rothrock said. "We have resided within primarily a real estate company, and yet the assets that we sell are maybe 20 percent real estate."

Over the years, ATREG has been involved in the sale of several fabs, including for clients Qimonda AG, Atmel Corp., IDT, Freescale Semiconductor and others. According to Rothrock, the group's primary competition is in the former of companies' internal merger and acquisition teams. About half of the transactions ATREG is involved in are confidential, he said.  

An example of the often complex transactions ATREG has been involved in is the sale of Qimonda's fab in Sandston, Va., in 2009. Qimonda, which had filed for bankruptcy protection, sold the fab's entire 300-mm equipment set for $172.5 million to Texas Instruments Inc., which brought the equipment to install at the first 300-mm analog production fab in Richardson, Texas. ATREG later sold the fab shell on behalf of Qimonda to Richmond Semiconductor LLC, which turned it into a datacenter. 

"We've become more and more about those types of deals than what we were when we started 12 years ago," Rothrock said. 

ATREG will now operate out of its new headquarters in Seattle, led by Rothrock, who previously served as the ATREG division's senior vice president and executive director within Colliers. All ATREG division employees are transferring to the company’s new location, Rothrock said. 

"This is a really good win-win for both ATREG and Colliers," Rothrock said. "Colliers will continue to service the real estate needs of the clients. We are incredibly grateful for the support they've given us over 12 years." 

Qimonda appoints team to sell 300-mm wafer fab
Peter Clarke

4/21/2009 10:52 AM EDT

LONDON — Former DRAM manufacturer Qimonda North America Corp. has announced the appointment of Colliers International, Emerald Technology Valuations LLC and Gordon Brothers to assist it in the sale of a wafer fab at Sandston, Virginia, subject to bankruptcy court approval.

Qimonda said the advisory team is starting talks with potential buyers who may consider operating the 300-mm wafer fab. When facilitized it has had a manufacturing capacity of 38,000 wafers and is capable of being operated with a 65-nm CMOS process, Qimonda said.

If a buyer is not found for the wafer fab complete, the advisory team is ready to move on to a complete 300-mm production line sale and clean room and other manufacturing facilities sold in separate transactions.

"This is the first time an operational 300-mm fab has come to the market for sale. The fully automated, state-of-the-art Qimonda Richmond site was built and equipped at a cost of approximately $3 billion, and volume 300-mm production began in 2005," said Stephen Rothrock, managing director of ATREG, a division of Colliers International.

Qimonda North America Corp. and Qimonda Richmond LLC each filed for creditor protection under Chapter 11 of the Bankruptcy Code on February 20, 2009.

Seattle, WA, July 14, 2008 – ATREG, a division of Colliers International, has just released the attached 2020 report forecasting surplus semiconductor assets will play a significant role in driving down costs necessary to accelerate the photovoltaic industry’s growth through 2020. 

ATREG helps companies restructure advanced technology assets and recently sold a semiconductor fabrication plant in Europe to be retrofitted for silicone-based solar cell manufacturing. ATREG is predicting this transfer of manufacturing from semiconductor chips to solar energy will be a future trend for these facilities as the need for alternative energy increases due to rising oil costs, population growth, and growing dependency on non-sustainable electric energy.   

“ATREG is witnessing a significant increase of surplus semiconductor manufacturing assets as integrated device manufacturers have embraced asset-light or fabless operating models in favor of third-party ‘foundry’ manufacturing in Asia,” said Stephen Rothrock, Colliers senior vice president and managing director of ATREG.  Rothrock added, “The growing number of surplus assets in the semiconductor sector has created a unique window of opportunity for photovoltaic companies, which can acquire these assets at prices far below replacement cost.  Adaptive reuse fits well because many of the silicon solar processes are built off the same foundation as semiconductor manufacturing and many of the base tools overlap.”   

ATREG consults in the valuation, market trends/activity, and strategic assessment to optimize capital expenditures and operations and has created relationships with key industry executives.  ATREG tracks the sale of cleanroom manufacturing facilities globally and reports on several recent adaptive reuse (semiconductor to solar) sales in the report.