Category Archives: LEDs

September 19, 2006 – The group of private investors that swooped in with an 11th hour bid for Freescale Semiconductor Inc. says it has backed out of the running, after the company accepted a $17.6 billion offer by a rival group, according to reports by Reuters and TheStreet — even though the chipmaker left the door open for other buyout offers.

The investor group consisting of Kohlberg Kravis Roberts, Silver Lake Partners, Apax Partners, and Bain Capital was reportedly a last-minute bidder for Freeescale, the former Motorola chipmaking arm now ranked as the world’s 10th-largest chipmaker with nearly $6 billion in revenues, focusing mainly on embedded chips for markets including automotive and communications. KKR and Silver Lake led the recent $10.6 billion buyout of Royal Philips Electronics’ former chip unit, leading to speculation that it might combine that business (since relaunched as a new company, NXP) with Freescale. Analysts speculated that a Freescale/NXP combination would make sense insofar as both companies already partner for semiconductor manufacturing in the Crolles2 alliance in Europe, along with STMicroelectronics.

But late last week, Freescale accepted the $17.6 billion cash offer from its initial suitor, a private equity consortium consisting of The Blackstone Group, The Carlyle Group, Permira Funds, and Texas Pacific Group. The deal, unanimously approved by the company’s board, calls for the consortium to purchase all Class A and Class B shares of Freescale for $40/share in cash, about a 36% premium over Freescale’s average closing share price of Sept. 8 — although that premium has been significantly reduced since the takeover rumors started swirling.

In revealing its agreement with the Blackstone-led group, Freescale noted a provision that allows it to solicit alternative proposals for 50 days, with Freescale paying an undisclosed breakup fee if another deal is accepted — suggesting that there was still hope for the KKR and Silver Lake group.

With new ownership, Freescale is likely to consolidate several wireless and data transport semiconductor companies, to develop complete system-level solutions for the communications, automotive, and wireless markets, according to American Technology Research analyst Doug Freedman. Revenues could swell to $8-$9 billion over the next 3-4 years — and maybe to $10-$12 billion if additional acquisitions are pursued — with a 18%-25% operating profit, and potential valuation of $30-$32 billion, nearly twice the current bidding price, he wrote, in a research note.

(September 18, 2006) AUSTIN, TX &#151 Freescale Semiconductor, Inc., has entered into a definitive merger agreement with a private equity consortium. The group plans to acquire Freescale at a total equity value of $17.6B. The merger is led by Blackstone Group, an investment firm founded in 1985; Carlyle Group, which focuses on telecommunications and media, aerospace and defense, industrial, and technology investments; Permira, an independent business based in Frankfurt, London, Madrid, Milan, New York, Paris, Stockholm, and Tokyo; and Texas Pacific Group, who invests in Lenovo, ON Semiconductor, and other technology franchises.

September 15, 2006 – Confirming rampant rumors, Freescale Semiconductor Inc. says it has agreed to be acquired for $17.6 billion in cash by a private equity consortium consisting of The Blackstone Group, The Carlyle Group, Permira Funds, and Texas Pacific Group.

Under the deal, unanimously approved by the company’s board, the consortium will purchase all Class A and Class B shares of Freescale for $40/share in cash, about a 36% premium over Freescale’s average closing share price of Sept. 8. That premium has mostly evaporated, however, with Freescale’s stock shooting up 22% this week on the takeover rumors.

Just days ago, speculation began flying that Blackstone was the frontrunner in a bid to acquire the former Motorola chipmaking arm, with a second 11th hour competing bid launched by a rival group including Kohlberg Kravis Roberts and Silver Lake Partners. KKR and Silver Lake led the recent $10.6 billion buyout of Royal Philips Electronics’ former chip unit, leading to speculation that it might combine that business (since relaunched as a new company, NXP) with Freescale.

In revealing its agreement with the Blackstone-led group, Freescale noted a provision that allows it to solicit alternative proposals for 50 days, and if another deal is accepted Freescale would pay an undisclosed breakup fee — perhaps keeping hope alive for the KKR and Silver Lake suitors.

Freescale, spun out of Motorola in 2004, is now the world’s 10th-largest chipmaker with nearly $6 billion in revenues, focusing mainly on embedded chips for markets including automotive and communications. A proposed Freescale/NXP combination would make sense insofar as both companies already partner for semiconductor manufacturing in the Crolles2 alliance in Europe, along with STMicroelectronics.

No matter who ultimately buys Freescale, one of two scenarios is likely to play out, according to American Technology Research analyst Doug Freedman. Freescale could become a consolidating force, buying up other semiconductor companies deemed cheap investments or ones that have synergies in wireless and network processor markets. Or, the company could see more value in splitting off its wireless and TSPG/NCS groups, and sell one to fund expansion of the other, he wrote, in a research note.

Freedman believes that under new ownership, Freescale will consolidate several wireless and data transport semiconductor companies, to develop complete system-level solutions for the communications, automotive, and wireless markets. Revenues could swell to $8-$9 billion over the next 3-4 years — and maybe to $10-$12 billion if additional acquisitions are pursued — with a 18%-25% operating profit, and potential valuation of $30-$32 billion, nearly twice the current bidding price, he noted.

September 13, 2006 — /FDA News/ — The Food and Drug Administration (FDA) is reminding companies that manufacture human cells, tissues, and cellular and tissue-based products (HCT/Ps) that they must comply with FDA regulations.

The issuance of the guidance to industry follows two recently identified cases of serious violations of safety requirements pertaining to the recovery of tissues, and subsequent FDA actions to stop the operations. This guidance is intended to ensure that companies involved in any or all steps in the recovery, processing, storage, labeling, packaging, or distribution of any human cell or tissue, and screening or testing of the cell or tissue donor, are aware of their regulatory responsibilities.

“Patient safety is our primary concern,” said Jesse Goodman, MD, MPH, director of FDA’s Center for Biologics Evaluation and Research (CBER). “This guidance serves to emphasize the important role that manufacturers play in enhancing tissue safety by helping to ensure that those that perform work for them also comply with the regulations. This is consistent with the efforts, which we applaud, of professional associations to foster quality and compliance with FDA regulations by all involved.”

Current good tissue practices (CGTP) require manufacturers to recover, process, store, label, package and distribute human cells or tissues in a way that prevents the introduction, transmission, or spread of communicable diseases and prevents contamination during manufacturing. All tissue establishments are required to comply with the regulations applicable to the manufacturing steps they perform. FDA will act as needed to ensure that tissue establishments, including tissue recovery firms, are in full compliance with applicable requirements. However, another important safeguard is the requirement that, if a manufacturer enters into a contract, agreement or other arrangement with another establishment to perform any step in the manufacturing process (such as recovery), the manufacturer takes steps to ensure that such an establishment also complies with applicable CGTPs. Such steps have already been very important in helping identify and correct potential problems.

In addition to this action, FDA’s Human Tissue Task Force (http://www.fda.gov/bbs/topics/NEWS/2006/NEW01440.html) will complete a comprehensive evaluation of the first year of implementation of the agency’s newly promulgated regulations which require manufacturers to comply with CGTP and donor eligibility requirements. These requirements were finalized in 2005. The task force, which is led by senior FDA officials, was established as part of the agency’s efforts to strengthen its risk-based system for regulating human cells and tissue.

For a copy of the guidance, visit: http://www.fda.gov/cber/gdlns/cgtpmanuf.htm

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Paul Richards, 301-827-6242
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September 14, 2006 – Toppan Photomasks is seeing its lead shrink in the semiconductor photomask this year, as the overall segment adjusts to smaller growth due to design activity and a shift in capex from memory firms, according to a new report from The Information Network.

Boosted by its acquisition of DuPont Photomask, Toppan led the worldwide merchant market with a 40.1% share in 2005, surpassing No. 2 Dai Nippon Printing with a 31.8% share. But DNP could retake the top spot this year, leveraging its technology and alliances with major chipmakers, accoding to Robert Castellano, president of the New Tripoli, PA-based market research firm. In recent years, DNP has actively pursued alliances with many major semiconductor manufacturers, including a JDP with Intel (1998), Hitachi Ltd.’s photomask division (acquired in 1999), alliances with Toshiba, Fujitsu, and UMC (2000), Xilinx (2001), and STMicroelectronics (2002). “The technology achieved from these arrangements and the investment needed to foster them [has] propelled DNP,” he told WaferNEWS, adding that DNP’s most recent alliance with ProMOS Technologies (in mid-2004), should help to expand its share of the photomask market even further.

Most analysts expect the semiconductor market to grow ~10% in 2006, but that doesn’t necessarily translate to an increase in photomask sales, noted Castellano. Demand for photomasks is a direct function of design activity, not sales volume from products using photomasks, he said, projecting the photomask market will grow only 4.3% this year to $3.2 billion, a significant slowdown from 9.7% growth in 2005, and 18.7% growth in 2004.

Castellano noted that more than 50% of the largest capex spenders this year are directing investments at memory production expansions, led by first- and second-tier memory vendors aggressively expanding capacity. More capex investments from memory firms means a change in the type and quantity of photomasks utilized — e.g. DRAM masks are sued for a relatively large number of wafers, meaning fewer photomasks will be used, he stated.

“Companies make million of memory devices from the same mask set, only changing masks when they do a die shrink. So, the same mask set could be used for up to six months,” he explained. On the other hand, logic device makers or foundries make fewer chips from the same mask set, changing mask sets more frequently because of device evolution or new customers, he said.

September 8, 2006 — /PRNewswire-FirstCall/ — MIDLAND, Mich. — The Dow Chemical Company (NYSE:DOW) has announced the formation of Dow Water Solutions, a business unit comprised of world-class brands and enabling component technologies designed to advance the science of desalination, water purification, contaminant removal and water recycling.

The new business becomes the Company’s fourth market facing business. Applying similar business models as Dow Building Solutions, Dow Automotive and Dow AgroSciences, the unit will focus on proactively meeting the needs of the Company’s water industry customers by leveraging the full breadth and depth of capabilities and technologies found within its value centers and across the Company.

“This move underscores Dow’s commitment to strengthen its Performance business portfolio by prioritizing marketing and application development activities that support high-value, end-use applications,” explained Andrew Liveris, chairman and chief executive officer, The Dow Chemical Company. “Dow Water Solutions will provide a range of competitive water treatment products that allow our customers to stimulate and capture industry growth, while continuing to improve access to higher quality water supplies that are more affordable and sustainable for communities and industries worldwide.”

Part of Dow’s strategy is to focus on developing more technology-driven, market facing businesses to accelerate a portfolio shift to Performance businesses, driving higher growth and more consistent profitability for the Company. The new framework for Dow Water Solutions also further solidifies Dow’s commitment to provide pure water for both industrial and drinking water applications globally as part of the Company’s Sustainability Goals for 2015, announced in May 2006.

“Core to our pursuit of market facing businesses, we will leverage our intimate knowledge of the water industry value chain to work with cities, countries and customers everywhere to apply our best thinking and technology in response to the world’s growing needs for clean water,” said Romeo Kreinberg, Dow’s executive vice president, Performance Plastics and Chemicals portfolio. “Dow is dedicated to this business and to the customers and consumers who will benefit from our expansion into this area.”

With revenues of approximately $350 million, Dow Water Solutions is a performance business unit that maintains five production facilities globally to manufacture, market and sell FILMTEC(TM) reverse osmosis membranes, DOWEX(TM) ion exchange resins, ultrafiltration, and electrodeionization products and other technologies. With over 1,000 employees worldwide, the business is well-positioned to capture much of the industry growth of water and non-water treatment and separations solutions.

“Over the years, we have developed and acquired a selective portfolio of complementary components that are critical to the functionality of water purification systems,” said Ian Barbour, general manager, Dow Water Solutions. “Through our technology leadership and expertise in component manufacturing, we are building a leading portfolio of key technologies necessary to address target market needs.”

Dow recently expanded its portfolio with three new component technologies, namely Ultrafiltration (UF), Electrodeionization (EDI), and Membrane Bio-Reactors (MBR), through the acquisition of Zhejiang Omex Environmental Engineering Co., Ltd. in July 2006. These technologies will be included in the Dow Water Solutions portfolio, along with existing product offerings in reverse osmosis and ion exchange.

Both UF and MBR are critical to water re-use applications and UF enables the water treatment providers to meet more stringent water quality standards. Dow is already an established leader in reverse osmosis/nanofiltration (RO/NF) membranes and ion exchange resins.

Through development and optimization of these technologies, Dow will offer solutions for specific water purification needs, including seawater desalination, water re-use and small community drinking water systems.

“By offering components as stand-alone or in combination, we can provide our OEMs with additional value that they could not achieve on their own. We have found that these complementary processes enable production of the highest quality water at the lowest attainable cost,” said Barbour.

As part of its commitment to water purification, Dow Water Solutions has also announced the successful start-up of the expansion of the FILMTEC(TM) reverse osmosis membrane manufacturing facility at Edina, Minnesota. Dow also recently formed a partnership with Blue Planet Run Foundation to raise awareness and funds for water purification projects.

About The Dow Chemical Company

Dow is a diversified chemical company that harnesses the power of science and technology to improve living daily. The Company offers a broad range of innovative products and services to customers in more than 175 countries, helping them to provide everything from fresh water, food and pharmaceuticals to paints, packaging and personal care products. Built on a commitment to its principles of sustainability, Dow has annual sales of $46 billion and employs 42,000 people worldwide. References to “Dow” or the “Company” mean The Dow Chemical Company and its consolidated subsidiaries unless otherwise expressly noted.

Source: The Dow Chemical Company

CONTACT: Chris Huntley of The Dow Chemical Company, +1-989-636-2876

Web site: http://www.dow.com/

The surge in demand for consumer electronics has led to tracking broader economic trends such as consumer spending as one more factor influencing semiconductor demand, and thus industry growth projections. But analysts are split as to whether the industry should adopt such a broad-based economic benchmark as a leading indicator.

“Continuing to use the GDP as a predictive tool for the semiconductor industry today may greatly mislead decision-makers,” according to Rosa Luis, director of marketing and sales for Saratoga, CA-based firm Advanced Forecasting. In a statement, she noted that the GDP’s historical year-on-year quarterly growth rate lined up well with IC revenues from the period of 2000-2004, but the two metrics were not closely associated in the decade before that, and have not been linked since 2005 to the present. Further, the 2001 “dot-com” recession hit many US industries particularly hard, not just the IC industry — metal fabrication, construction materials, and automobiles all experienced increasing growth rates leading to a peak in 2000, followed by a severe decline. Those other industries similarly lined up with the US GDP during 2000-2004, with correlations varying from “non-existent to strong” in the other periods. (Click here for graphical comparisons of US GDP vs. IC and other industries.

“The fact that IC revenues matched GDP (with a lag of three months) wasn’t unique to the semiconductor industry, and like in other industries, this phenomenon vanished afterward,” noted the firm, in a statement. “Therefore, continued use of the GDP as a predictive tool for the IC industry based on the strong correlation during that period is risky.”

At least one analyst disagrees, noting that a more appropriate metric is actually worldwide GDP, not just for the US, and it’s certainly not the only predictive tool in the belt of industry analysts. “Global economic health certainly plays a hand in shaping growth in the semiconductor industry,” Rob Lineback, analyst with IC Insights, told WaferNews, noting that overall economic conditions also impact other industries, but that shouldn’t discount the influence of GDP growth on IC demand. “Other industries use semiconductors, and if they suffer a downturn, so do companies in the IC supply chain,” he said.

In the firm’s mid-year 2006 conference call, Bill McClean, president of IC Insights, pointed to a clear correlation between a booming worldwide economy and semiconductor boom years [see chart below]. Four out of the past five peak years for semiconductor sales (1984, 1988, 1995, and 2004) occurred when the worldwide economy grew 4.5% or better, he noted. Meanwhile, two of the four years of declining semiconductor sales also occurred during global recessions (1998, 2001). The other two years (1985, 1996) were due to “a tremendous amount of overcapacity after overspending,” he said.

Worldwide GDP is “more of a ‘coincident’ indicator,” part of an overall set of assumptions as a semiconductor forecasting tool along with the usual suspects — capital spending, IC average selling price trends, unit volume shipments, capacity utilization, number of good die per wafer, etc, said McClean. Other factors to be considered include where the industry is in terms of a technology/feature-size transition, or if there’s a hot new product making a splash in the marketplace (e.g., MP3 player or PC cycle upgrade).

“There is no magic formula, no magic leading indicator, but we expect and believe that GDP growth on a worldwide basis gives us another key assumption in our forecasting methodology,” McClean told IC Insights’ clients in the conference call.

Sept. 12, 2006 — QD Vision Inc. of Watertown, Mass., announced it has been quietly developing and refining a proprietary and scalable printing technique for the manufacture of quantum dot (QD) displays and has begun discussions with commercialization partners.

The company says the fabrication method employed is derived from a quantum-dot contact printing method originally developed at MIT. According to QD Vision CEO Mark Comerford, the successful demonstration of the company’s proprietary process is a technological milestone that will help pave the way for a new generation of displays that are larger, more reliable and higher quality.

The prototype red monochrome QD display has a 32 x 64 pixel count. The light emission originates from quantum dots — tiny inorganic semiconductor nanocrystals synthesized at QD Vision. The quantum dots were printed within a sandwich of organic semiconductor thin films, which deliver energy to the quantum dots enabling light emission.

“This is the first time we have produced a multi-pixel display using our new process, which is fundamentally capable of printing the fine features required for high-resolution display applications,” said Seth Coe-Sullivan, chief technology officer and co-founder of QD Vision, in a prepared statement. “In addition to making an attractive prototype display, this achievement demonstrates that QD Vision’s printing method can provide the uniformity over the extremely large areas necessary for printing displays.”

September 11, 2006 – Two investment firm consortiums are in a bidding war to acquire Freescale Semiconductor, with the pricetag for the former Motorola chipmaking arm soaring past $16 billion, according to a New York Times report.

The frontrunner group includes Texas Pacific Group, the Blackstone Group, Permira and the Carlyle Group, but a rival group including Kohlberg Kravis Roberts and Silver Lake Partners is also at the negotiating table, having “swooped in with a last-minute offer that was higher,” according to the report, citing sources involved in the negotiations. KKR and Silver Lake led the recent $10.6 billion buyout of Royal Philips Electronics’ former chip unit, and aim to combine that business (since relaunched as a new company, NXP) with Freescale, according to the report.

Freescale, spun out of Motorola in 2004, is now the world’s 10th-largest chipmaker with nearly $6 billion in revenues, focusing mainly on embedded chips for markets including automotive and communications. A proposed Freescale/NXP combination would make sense insofar as both companies already partner for semiconductor manufacturing in the Crolles2 alliance in Europe, along with STMicroelectronics.

In a short press release, Freescale confirmed that “in discussions with parties relating to a possible business transaction,” but refused to discuss any details “unless and until it is appropriate to do so.”

Investor groups like the two suitors for Freescale, and those who pursued Philips’ chip unit, “have recognized that the semiconductor industry has shown an ability to increase margins even as growth rates have slowed and the inventory cycles have dampened,” according to American Technology Research analyst Doug Freedman. They also “have recognized that the fab light strategy has increased free cash flow and limited the impact of inventory cycles on the industry-wide margins,” he wrote in a research note.

Whichever group ends up acquiring Freescale, one of two scenarios is likely to play out, according to Freedman. Freescale could become a consolidating force, buying up other semiconductor companies deemed cheap investments or ones that have synergies in wireless and network processor markets. Or, the company could see more value in splitting off its wireless and TSPG/NCS groups, and sell one to fund expansion of the other, he wrote, in a research note.

Freedman believes the new owners of Freescale will consolidate several wireless and data transport semiconductor companies, to develop complete system-level solutions for the communications, automotive, and wireless markets. Revenues could swell to $8-$9 billion over the next 3-4 years — and maybe to $10-$12 billion if additional acquisitions are pursued — with a 18%-25% operating profit, and potential valuation of $30-$32 billion, nearly twice the current bidding price.

September 7, 2006 – The Dow Chemical Co. has signed a licensing deal to transfer development, manufacturing, and sales and marketing for spin-on silicon containing its “Ensemble” dielectric coatings to Brewer Science, Rolla, MO. Terms of the deal were not disclosed.

The move is part of Dow’s efforts to focus on expanding its core business for dielectric materials for wafer-level chip-scale packaging, integrated passives, and SiLK dielectric materials, according to the company.

Dow began development of the Ensemble coatings several years ago, targeting multiple applications in semiconductor processing, including pre-metal dielectric, hardmask, and shallow trench isolation applications. Since 2004, the two companies have been working to develop and market coatings for lithographic applications, and claim “process of record” wins at a major Asian chipmaker for advanced photolithography applications, and an early POR for an immersion process at a major US manufacturer.

Dow and Brewer position the Ensemble line as applicable for a variety of areas, including: immersion lithography processes, double patterning, low-k dielectrics, shallow trench isolation, CMP, hardmask applications, and pre-metal dielectric processes. Combining the spin-on silicon with an antireflective coating results in reduced etch complexity compared with CVD films, easier resist re-work, better photoresist compatibility, and longer shelf life than other spin-on silicon-based coatings, according to Brewer.

Marvin Bourelle, global commercial manager of Dow’s advanced electronic materials business, stated that Brewer’s expertise and reach in antireflective coatings for semiconductor applications is a good fit with the Ensemble dielectric coatings. “Now that we have licensed this technology more broadly, we intend to develop it further to increase and broaden the total value it offers our industry,” added Andy Waite-Wright, executive director, marketing and sales for Brewer Science, in a statement.