In a surprise reshuffling of the market for advanced semiconductor materials, Infineon Technologies announced that it has agreed to buy Wolfspeed, the former division of Cree that makes power and radio frequency chips.
The company is paying $850 million in cash for Wolfspeed, which makes new energy-efficient chips for power electronics and special chips for wireless infrastructure. The deals marks Infineon’s latest bet on growing markets for electric cars, renewable energy systems, and the Internet of Things. The German chipmaker’s products already include chips for sensors, security, and electrical inverters.
“Joining forces with Wolfspeed represents a unique growth opportunity,” said Reinhard Ploss, Infineon’s chief executive, said in a statement. “This will enable us to create additional value for our customers with the broadest and deepest portfolio of innovative technologies and products in compound semiconductors.”
Wolfspeed runs production lines for making wide bandgap semiconductors, which are capable of handling higher voltages and switching frequencies than silicon chips. Their products are smaller and thinner than conventional chips, lowering energy losses in the process.
Its major product is silicon-carbine chips for power-management electronics. The company also layers gallium-nitride semiconductors on SiC material, forming integrated circuits for wireless applications.
As part of the deal, Infineon will take over Wolfspeed’s wafer substrate business, but only the parts related to power and radio chips. Cree will retain control of materials used in LED lighting.
GaN-on-SiC substrates are slowly picking up speed in satellite, telecommunications, and radar systems. Wolfspeed’s foundry can handle the manufacturing of high-electron-mobility transistors (HEMTs) on massive microwave integrated circuits. Gallium-nitride is extremely efficient at handling frequencies up to 80 GHz, which could be used in 5G wireless networks.
The transaction was announced only months after Cree rebranded the business as Wolfspeed, while it worked out the details of the division’s initial public offering. The spinout was an attempt for Cree to focus more closely on its main business of LED lighting. Chuck Swoboda, chief executive of Cree, said that was the same reason why Cree decided to sell.
After the announcement that Wolfspeed would have an initial public offering, several companies made offers to buy the business directly, Swoboda said. “After much consideration and due diligence over the past year, we concluded that selling Wolfspeed to Infineon was the best decision for our shareholders, employees and customers,” he said.
Wolfspeed employs around 550 workers and holds 2,000 patents and patent applications. Infineon plans to complete the acquisition by the end of 2016.
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