2010 Media Coverage

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."