15 September 2015

IQE inks exclusive licence and option agreement to acquire Translucent's cREO technology

Epiwafer foundry and substrate maker IQE plc of Cardiff, Wales, UK has signed an agreement with Silex Systems Limited's subsidiary, Translucent Inc, for the  exclusive licence of Translucent's 'Rare Earth Oxide' (cREO) semiconductor technology, and taken an option  to subsequently acquire the technology.

IQE says that Translucent's  cREO technology offers a unique approach to the manufacture of a wide range of innovative compound semonductor on silicon products, including  gallium nitride (GaN) on silicon (Si) for power switching and RF technologies markets.  It is protected by a wide ranging IP portfolio consisting of 74 granted patents, and 13 additional patent applications, adds the firm.

IQE's CEO Dr Drew Nelson said, "This is a first class deal and great opportunity for IQE. We are at the forefront of a new era in the semiconductor industry which is bringing to market unique high performance compound semiconductor materials required for the modern 'Internet of Things' world.  At the same time we are leveraging the low cost and large wafer size benefits of the silicon industry that has been at the core of the information technology revolution over the last 40 years. We are very excited to be able to take Translucent's unique 'cREO' technology to market, and thereby create a significant new platform to drive our business into several new large volume areas".

Key terms of the agreement:

• The agreement provides IQE with an exclusive 30 month licence for the commercialisation of the Translucent cREO technology and an exclusive option (exercisable solely at IQE's discretion) on the subsequent acquisition of the cREO technology.

• IQE will pay Silex up to a maximum consideration of USD 1.5m (USD 0.085m of the maximum USD 1.5m consideration is conditional upon certain delivery obligations being met), payable within six months of the date of the agreement in either cash or IQE shares, for the licence and option agreement.

• The agreement includes the transfer of a range of manufacturing and characterisation equipment from Translucent to IQE, and also includes the exclusive services of two key engineers for 12 months in order to  transfer the cREO technology to IQE. Translucent will then cease all operations in Palo Alto, California, their sole development site.

• Within the 30 month licence period, IQE has an exclusive option to acquire the cREO technology and IP portfolio for a consideration of USD 5 million, payable within 6 months following exercise of the option in either cash or IQE shares2. In addition, a long term royalty will be payable in cash to Translucent on the sale of IQE products which utilise the cREO technology transferred as follows: 3% on epi products, or 6% on cREO templates.

• All new IP generated relating to the technology will belong exclusively to IQE, as of today's date.

• Should the licence expire after 30 months without IQE taking up the assignment option, or should the agreement otherwise be terminated, all rights to the cREO technology that was transferred to IQE and the related equipment will revert to Translucent

Silex's CEO Dr Michael Goldsworthy said, "This is a great outcome for Translucent, representing an excellent path to market for the cREO technology after an extensive research and development program over the past decade by our team in Palo Alto, California. IQE is the world's leading epiwafer supplier, and epitaxy is the key technology for the introduction of new high performance materials required for the continued evolution of the global semiconductor industry. IQE is very well positioned to capitalise on the introduction of new semiconductor materials, and is the best commercial partner to take Translucent's unique technology to market."

Tags: IQE Translucent Epiwafer

Visit: www.translucentinc.com

Visit: www.iqep.com