February 6, 2007 – The new owners of Cypress Semiconductor’s Silicon Valley Technology Center bring two varied backgrounds of technology and services expertise, both of which will help the center expand into new areas such as MEMS, and possibly extend relationships with foundries, according to GM Bert Bruggeman, in an interview with WaferNEWS.
Last week Cypress said 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, “turned a capital-intensive operation into a profit center,” according to 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, and at this point Cypress “can do R&D more cost-effectively as an SVTC customer than as an owner,” he said.
The new SVTC owners, Oak Hill Capital Partners and Tallwood Venture Capital (private equity and venture capital, respectively), clearly bring different capabilities and backgrounds. Tallwood has a number of portfolio companies in the semiconductor space, working on various areas in photonics, CMOS, memory, power, and RF (and some of whom already work with the SVTC, e.g. Cavendish). Oak Hill, meanwhile, has little tech background but much experience with managing outsourced services — which is essentially what the SVTC is, if you decouple the business from its semiconductor technology, pointed out Bert Bruggeman, GM for the SVTC. (Both firms declined to comment on their involvement with SVTC.)
Under new ownership the SVTC expects to gain more capabilities and more processes/equipment to work with, but otherwise customers shouldn’t see any change in their work or how they interact with the center, according to Bruggeman. He told WaferNEWS that the center’s raison d’etre remains the same: providing a bridge for companies of all sizes to access equipment and tweak their processes and IP — “get their hands dirty” — without having to invest in technology infrastructure, nor giving up or sharing IP ownership with a foundry.
Looking ahead, the SVTC will look to expand its CMOS-derivative offerings of memory, display, and energy, first including more work around MEMS. “There’s a lot of momentum there,” Bruggeman said. MEMS developers “need to act more like traditional semiconductor ventures,” and can learn how to do so in the SVTC environment, he said.
He also sees more opportunities to come from the actual foundries themselves — not as a competitor, but more like a referral, and he implied that more news along this front would be revealed later this year. “Foundries’ bread and butter is to make sure you have T[SMC]- or U[MC]- compatible platforms — that’s the number one thing they care about,” he explained. The typical SVTC customer, meanwhile, is doing “disruptive” process development that’s so far from being T- or U-compatible that “most foundries run away” because it’s too disturbing to their manufacturing. “We’re the perfect vehicle to develop against manufacturing standards with foundries,” Bruggeman said.