6 March 2018
Cree acquires Infineon RF Power business for €345m
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Cree Inc of Durham, NC, USA has acquired the Radio Frequency (RF) Power business of Infineon Technologies AG of Munich, Germany for about €345m. The transaction expands the Cree Wolfspeed business unit’s wireless market opportunity, while Infineon continues to focus on key growth areas such as electro-mobility, autonomous driving, renewables and technologies for a connected world.
“The acquisition strengthens Wolfspeed’s leadership position in RF GaN-on-SiC technologies, as well as provides access to additional markets, customers and packaging expertise,” says Cree’s CEO Gregg Lowe. “This is a key element of Cree’s growth strategy and positions Wolfspeed to enable faster 4G networks and the revolutionary transition to 5G,” he adds.
“Cree is a strong new owner for this portion of our RF business,” comments Infineon’s CEO Reinhard Ploss. “We will be able to focus our resources more effectively on Infineon’s strategic growth areas and will retain a strong technology portfolio for the wireless market.”
Infineon and Cree have a long-standing history of collaboration and shared business interests. The acquired Infineon RF Power team and capabilities will complement Wolfspeed’s existing expertise with additional technology, design, packaging, manufacturing and customer support. The business offers transistors and monolithic microwave integrated circuits (MMICs) for wireless infrastructure RF power amplifiers based on both LDMOS silicon and gallium nitride on silicon carbide (GaN-on-SiC) technologies. The transaction includes:
- the main facility in Morgan Hill, CA, USA, which includes back-end packaging & test operations for LDMOS and GaN-on-SiC, as well as the intellectual property (IP) and technology portfolio;
- established customer relationships with leading manufacturers of wireless infrastructure equipment, including field support personnel on site;
- about 260 staff in the US locations at Morgan Hill and Chandler, AZ, as well as in Finland, Sweden, China and South Korea; and
- a transition service agreement to ensure business continuity and a smooth transition under which Infineon will perform substantially all business operations for about the next 90 days.
The transaction does not include the Infineon Chip Card & Security (CCS) operations in Morgan Hill that will remain at the site and continue to operate as part of Infineon.
Infineon will support the transaction with a long-term supply agreement for LDMOS wafers and related components out of its fab in Regensburg, Germany, and will also supply assembly & test services out of its facility in Melaka, Malaysia.
Cree funded the €345m acquisition from cash and borrowings on its revolving line of credit. The Infineon RF Power business will become part of Cree’s Wolfspeed operating segment and is targeted to increase annual revenues by about $115m in the first 12 months post-acquisition. Also, the acquisition is targeted to be accretive to Cree’s non-GAAP earnings per share in its first full quarter of operations with Cree (fiscal fourth-quarter 2018, ending 24 June). Targeted non-GAAP earnings per share exclude expenses related to the amortization of acquired intangibles, stock based compensation expense and one-time acquisition related expenses.