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July 1996, vol.13, no. 5
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TI to acquire Silicon Systems Inc.TI and TDK Corp. of Japan, through its U.S. subsidiary TDK U.S.A. Corp., have announced the signing of a stock purchase agreement by which TI would acquire TDK's semiconductor subsidiary, Silicon Systems Inc. (SSi). This acquisition strengthens TI's position in digital signal processing (DSP)solutions and in the mixed-signal/analog marketplace, and firmly establishes TI as a leading supplier of semiconductor products to the hard-disk drive and removable data storage markets. "This acquisition combines TI's digital signal processing solutions leadership, manufacturing capacity and process technology with SSi's analog/mixed-signal expertise," said Tom Engibous, TI president and chief executive officer. "It specifically meets the needs of the mass-storage industry, which requires high-volume, semiconductor technology partners to provide greater levels of density, integration and performance, ultimately resulting in more cost-effective solutions. It helps our customers meet their time-to-volume requirements with superior products." Rick Goerner, SSi executive vice president and chief operating officer, said, "Today's announcement is good news for our customers as we will now have access to TI's high-volume, global manufacturing network and advanced process technologies. We're also pleased that TI will retain SSi's innovative culture, which has created an impressive array of products for the hard-disk drive and removable storage markets." Upon closing, SSi will become a wholly-owned subsidiary of TI and retain its headquarters in Tustin, Calif. Goerner will become president of the subsidiary, reporting to Delbert A. Whitaker, SC Group senior vice president and worldwide manager of its mixed-signal and logic business. No staff reductions or major relocations are anticipated. Total purchase consideration at closing will be about $575 million, payable as a combination of cash and long-term note to TDK. In addition, the agreement includes potential contingent payments of up to $50 million based on future performance of the business. The cash portion of the purchase price will be financed on an interim basis using short-term financing in addition to existing cash on hand. TI is considering various alternatives for permanent financing. TI and TDK expect to close within the next several weeks, following appropriate regulatory approvals. SSi's Communications Products Division and TDK Systems Division are not part of the transaction. Serving the storage marketThe 1996 market outlook for hard-disk drives is strong. International Data Corporation (IDC) reports 1995 shipments of 89 million units, an increase of 30 percent over 1994. By the year 2000, 231 million units are expected to be sold."Removable storage" is products with storage media that can be removed from the equipment which reads/writes data from/to the media itself. Examples are CD-ROMs, magneto-optical drives (MOD) and digital video disks (DVD).
Closeup on SSiFounded: 1972Headquarters: Tustin, Calif. (30 miles south of LA) Employees: 2,000 Wafer fab: Six-inch, submicron wafer fabrication facility in Santa Cruz, Calif. Assembly/test site: Singapore Design engineering centers: Nevada City, Calif., Colorado Springs, Colo., Tokyo, Japan, and Singapore. Specialities: Design and manufacturing of application-specific, mixed-signal integrated circuits, primarily aimed at mass storage market. | |
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