Feb. 29, 2008 – In what is essentially the last in a divestiture of its semiconductor foundry operations, Zarlink Semiconductor has sold its analog foundry in Swindon, UK to a subsidiary of domestic electronics component supplier MHS Electronics — with a grand pricetag of €1 (~$1.51).
The actual terms of the deal indicate Zarlink actually will pay MHS €2M ($ 3.0M) to “support restructuring activities.” Zarlink also will pay MHS another $3.9M as part of a three-year wafer supply deal, covering about nine months of product orders. Zarlink will take a $13M book loss on the sale (about EPS $0.10) in its fiscal 4Q08, but says eliminating the unit’s losses from its books will become accretive in FY09 by EPS ~$0.05.
“This transaction will benefit Zarlink and its shareholders, while the Analog Foundry employees will prosper as part of a pure-play semiconductor foundry,” said Zarlink president/CEO Kirk Mandy, in a statement. “Zarlink can now focus our resources solely on growth initiatives in the wired communications, optoelectronics and medical markets.” The company’s foundry biz represented <10% of sales.
With the addition of Zarlink’s analog business, MHS will be able to offer services based on high-performance analog bipolar, BiCMOS & LDMOS technologies and specialized mixed-signal CMOS and BiCMOS processes. It also offers wafer manufacturing, prototyping, and test/assembly services for the aerospace, defense, and medical markets. All of the foundry’s ~120 Zarlink employees will be transferred to MHS Electronics.
The Swindon operation hasn’t had the best of years. Last summer the local River Ray overflowed its banks and flooded the site forcing closure and evacuation.