January 30, 2007 – Count one more chipmaker that’s decided to get out of the leading-edge R&D rat-race. Cypress Semiconductor Corp. says it is selling its Silicon Valley Technology Center (SVTC) 65nm process R&D shop to a pair of private equity firms for approximately $53 million in cash.

Opening up SVTC to partners in 2000, and officially formalizing the business in 2004 to focus on 65nm process technologies, paved the way for many silicon technologies to progress from “lab to fab” — and also “turned a capital-intensive operation into a profit center,” said T.J. Rodgers, president and CEO of Cypress, in a statement. However, the company’s shift toward a heavy mix of programmable products means it now has very few products that require leading-edge technology, making the SVTC a hard-to-justify business. “We can do R&D more cost-effectively as an SVTC customer than as an owner,” he said.

Opened to partners in 2000 and formalized in July 2004 as a 65nm R&D fab, the SVTC development facility allowed Cypress and partners to develop and characterize silicon-based technologies for ICs, MEMS, and nanotech and biotech applications, insulated from the interruptions and pressures of high-priority production requirements (though still offering seamless transfer to manufacturing). A significant portion of customer work involved MEMS and photonics, with other users coming from advanced memories — initial customer Matrix Semiconductor worked on its 3D memory architecture at SVTC, and Cavendish Kinetics’ embedded nonvolatile memory work began in July 2006. Work also has involved novel applications such as life-science chips and integrators of new semiconductor materials and nanomaterials.

The SVTC delivered its first 65nm/300mm wafers in Feb. 2005, utilizing 193nm lithography on an ASML Twinscan XT:1250 scanner, with other tooling including Applied Materials Verity CD-SEM and KLA-Tencor Archer AIM overlay metrology system. Over its duration, SVTC claims to have served “dozens of customers ranging from starts-ups to large fabless semiconductor companies,” according to a statement.

Oak Hill Capital Partners and Tallwood Venture Capital will take over essentially the entire SVTC, with “substantially” all equipment, process technologies, and employees. “We believe SVTC plays a valuable role in the semiconductor value chain,” stated J. Crandall, managing partner of Oak Hill, and “we are thrilled to provide resources that will allow SVTC’s management to pursue their vision and provide a wider range of services and technologies to the fabless semiconductor community.”