This puts together both companies’ strong presence in sectors such as power MOSFETs; Infineon has considerable mixed-signal/power integration expertise but will now add IR’s capabilities in integrated, multi-chip modules. Infineon refers to IR’s “system know-how in power conversion” – both companies are strong players in the power-management IC sector – as well as its expertise in compound semiconductors (Gallium Nitride on Silicon). Infineon has worked in both silicon carbide and GaN – in terms of silicon-alterantive technologies – but IR declared early for the GaN-on-silicon route and has a growing product offering in that technology.
As is usually the case in such announcements, the official statement says that the “ Acquisition creates a highly complementary and innovative semiconductor product portfolio,” and also notes, “distribution strength and a stronger regional presence.”
Infineon has offered $40 per share in cash to be paid for all International Rectifier outstanding shares, representing a premium of approximately 47.7% over the average share price of International Rectifier during the last three months and a premium of approximately 50.6% over the closing share price of International Rectifier on August 19, 2014.
Infineon also refers to economies of scale to be gained by merging the manufacturing of both companies’ product lines, although to what extent this produces real returns will only become apparent over time. Manufacture of discretes and power devices is characterised by diverse product ranges with, often, small dice, and the total silicon area of any one product line is often not such as to realise an instant benefit from semiconductor production scale-ups. For the highest volume/biggest dice product lines, the joining of Infineon and IR may enable an earlier shift to production on larger (300 mm) wafers.
In the official statement, Dr. Reinhard Ploss, CEO of Infineon Technologies AG, says: “The acquisition of International Rectifier is a unique opportunity. With their great knowledge of specific customer needs and their application understanding, International Rectifier employees will contribute to Infineon’s strategic development from product thinking to system understanding and system solutions. The combination of Infineon’s and International Rectifier’s products, technological and innovative excellence, as well as distributional strength will unleash great potential.”
And Oleg Khaykin, President and CEO of International Rectifier, says: “This transaction provides significant value to our stockholders and opens new strategic opportunities for both our customers and employees. By combining two complementary providers in power management solutions, International Rectifier will benefit from Infineon’s products and technologies, manufacturing and operational excellence and greater R&D scale.”
The acquisition closes an almost-70-year history in the industry; IR was founded by Eric Lidow in the late 1940s, making it one of the oldest semiconductor companies; Lidow died only recently, at the age of 100.