Cree, Inc. (NASDAQ: CREE) has acquired assets of Infineon
Technologies AG (FSE: IFX)(OTCQX: IFNNY) Radio Frequency (RF) Power
Business for approximately € 345 million. The transaction expands
the Cree Wolfspeed business unit’s wireless market opportunity.
Infineon continues to drive key growth areas such as
electro-mobility, autonomous driving, renewables and technologies
for a connected world. The transaction has closed and is effective
today.
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"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," said Cree 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." (Photo: Business
Wire)
“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,” said Cree
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.”
“Cree is a strong new owner for this portion of our RF business
and has an excellent reputation in the industry,” said Reinhard
Ploss, CEO of Infineon. “We are excited about the business
rationale and the prospects for the combined businesses. At the
same time, 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 technology
leadership, collaboration and shared business interests. The
acquired Infineon RF Power team and capabilities will complement
Wolfspeed’s existing offerings and expertise with additional
technology, design, packaging, manufacturing, and customer support.
This business holds a leading market position offering transistors
and MMICs (Monolithic Microwave Integrated Circuits) for wireless
infrastructure radio frequency power amplifiers based on both LDMOS
and Gallium Nitride on Silicon Carbide (GaN-on-SiC) technologies.
The transaction includes:
- The main facility in Morgan Hill (CA)
which includes packaging and test operations for LDMOS and
GaN-on-SiC;
- Well-established customer relationships
with leading manufacturers of wireless infrastructure equipment,
including field support personnel on site;
- Approximately 260 employees in the US
locations, 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
approximately the next 90 days.
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 and test
services out of its facility in Melaka, Malaysia.
“We are looking forward to combining our strengths with Cree,”
said Gerhard Wolf, Vice President and General Manager, RF Power
Products at Infineon. “With our highly skilled and dedicated team,
advanced technologies and commitment to business excellence, we
look forward to serving our customers seamlessly as the 5G mobile
standard ramps up.”
Background of the transaction
The transaction comprises Infineon’s RF Power operations for
wireless infrastructure in Morgan Hill (CA) and Chandler (AZ) in
the U.S., as well as locations in China, Sweden, Finland and Korea.
The state-of-the-art backend manufacturing in Morgan Hill, as well
as a leading intellectual property (IP) and technology portfolio
are also part of the transaction. 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.
Cree funded the Euro 345 million 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 approximately $115 million in the
first twelve months post acquisition. Additionally, the acquisition
is targeted to be accretive to Cree’s non-GAAP earnings per share
in its first full quarter of operations with Cree (which will be
Cree’s fiscal fourth quarter ending June 24, 2018). 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.
Cree Conference Call
Cree will host a conference call at 4:30 p.m. Eastern time today
to discuss this announcement. The conference call will be available
to the public through a live audio web broadcast via the internet.
For webcast details, visit Cree's website at
investor.cree.com/events.cfm.
In connection with the transaction, Wells Fargo Securities, LLC
served as financial advisor to Cree and BofA Merrill Lynch to
Infineon.
About Cree, Inc:
Cree is an innovator of Wolfspeed™ power and radio frequency
(RF) semiconductors, lighting class LEDs and lighting products.
Cree’s product families include SiC materials, power-switching
devices and RF devices targeted for applications such as electric
vehicles, fast charging, invertors, power supplies, telecom and
mil/areo. Cree’s LED product families include blue and green LED
chips, high-brightness LEDs and lighting-class power LEDs targeted
for indoor and outdoor lighting, video displays, transportation and
electronic signs and signals. Cree’s LED lighting systems and lamps
serve indoor and outdoor applications.
For additional product and Company information, please refer
to www.cree.com.
About Infineon’s RF Power operations for wireless
infrastructure
Infineon has a leading market position in creating RF Power
products. The product focus is on RF discrete Transistors and MMICs
for Power Amplifiers (RF PAs) for wireless infrastructure using
LDMOS and GaN-on SiC technologies.
About Infineon
Infineon Technologies AG is a world leader in semiconductor
solutions that make life easier, safer and greener.
Microelectronics from Infineon is the key to a better future. In
the 2017 fiscal year (ending 30 September), the Company reported
sales of around €7.1 billion with about 37,500 employees worldwide.
Infineon is listed on the Frankfurt Stock Exchange (ticker symbol:
IFX) and in the USA on the over-the-counter market OTCQX
International Premier (ticker symbol: IFNNY).
Further information is available at www.infineon.com
This press release is available online at
www.infineon.com/press
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Forward Looking Statements
This press release contains forward-looking statements involving
risks and uncertainties, both known and unknown, that may cause
Cree’s actual results to differ materially from those indicated in
the forward-looking statements. Forward-looking statements by their
nature address matters that are, to different degrees, uncertain,
such as statements about the anticipated benefits of the
transaction, including future financial and operating results.
Actual results, including with respect to our targets and
prospects, could differ materially due to a number of factors,
including the possibility that anticipated benefits of the proposed
transaction will not be realized; the risk that we may not obtain
sufficient orders to achieve our targeted revenues; price
competition in key markets; the risk that our results will suffer
if we are unable to balance fluctuations in customer demand and
capacity; the risk that we are not able to enter into contractual
arrangements with the customers of the acquired business; risks
associated with acquisitions generally; the risk that we are not
able to develop and expand customer bases and accurately anticipate
demand from end customers, which can result in increased inventory
and reduced orders as we experience wide fluctuations in supply and
demand; our ability to lower costs; product mix; risks associated
with our ability to complete development and commercialization of
products under development; risks associated with the ramp-up of
production of new products and our entry into new business
channels; the rapid development of new technology and competing
products that may impair demand or render our products obsolete;
the potential lack of customer acceptance for our products; and
other factors discussed in our filings with the Securities and
Exchange Commission (SEC), including our report on Form 10-K for
the fiscal year ended June 25, 2017, and subsequent reports
filed with the SEC. These forward-looking statements represent
Cree's judgment as of the date of this release. Except as required
under the U.S. federal securities laws and the rules and
regulations of the SEC, Cree disclaims any intent or obligation to
update any forward-looking statements after the date of this
release, whether as a result of new information, future events,
developments, changes in assumptions or otherwise.
Cree® is a registered trademark and Wolfspeed™ is a
trademark of Cree, Inc.
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Cree, Inc.Claire Simmons, 919-407-7844Corporate
Marketingmedia@cree.comorInfineon Technologies AGBernd Hops, +49 89
234 23888Bernd.Hops@infineon.comorInfineon Technologies Americas
Corp.Sian Cummings, +1-310-252-7148Sian.Cummings@infineon.com