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15 May 2008


M/A-COM’s GaAs fab to be divested by new owner Cobham

Tyco Electronics has agreed to sell the RF components and subsystems business of M/A-COM Inc of Lowell, MA, USA to UK defense firm Cobham plc for $425m. The acquisition is expected to complete in second-half 2008.

Microwave Associates was eastablished in 1950 in Boston, MA to provide magnetrons to the US Army Signal Corps, and in 1978 became M/A-COM to reflect growing involvement in the communications market (wireless telecoms and private land-mobile radio).

For the year to end-September 2007, M/A-COM generated operating profits of $37.9m on revenue of $477.7m. Comprising just under 40% of revenue, M/A-COM's Aerospace & Defence (A&D) business designs and manufactures RF and microwave subsystems and components, and is complementary to Cobham’s Defence Electronic Systems business.

Cobham says that the remainder (the non-defense commercial business) will be run outside of its operating divisions as non-core to its strategy and therefore held as an asset for resale.

M/A-COM has over 20 years experience of manufacturing GaAs monolithic microwave integrated circuits (MMICs), including acquiring GaAs MMIC maker ITT GaAsTEK of Roanoke, VA in 2000, where 8000ft² of cleanroom space adds to M/A-COM’s 24,000ft² wafer fab space in Lowell for manufacturing GaAs MESFETs, pHEMTs and silicon LDMOS. Products include ICs, power transistors and diodes for wireless communications and industrial/military and consumer applications, infrastructure/components for wireless applications such as cellular base-stations and WiMAX infrastructure using RF, microwave and semiconductor-based components, and RFID components for inventory management and asset tracking applications.

Cobham expects that the M/A-COM’s commercial business can be divested expeditiously for a value that supports its business case for the A&D acquisition, given the “encouraging level of interest believed to have been expressed during the auction by Tyco Electronics and some direct approaches received."

See related items:

Freescale to close Tempe GaAs fab

GaAs demand from digital cable to top $100m by 2012

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