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Cypress to sell SVTC biz for $53M

Posted: 02 Feb 2007 ?? ?Print Version ?Bookmark and Share

Keywords:Cypress? Silicon Valley Technology Center? SVTC's R&D?

Taking a new step to move its business forward, Cypress Semiconductor Corp. will sell its R&D arm Silicon Valley Technology Center (SVTC) to private equity firms Oak Hill Capital Partners and Tallwood Venture Capital for $53 million.

Under the transaction that will close by early March, Cypress will transfer all equipment, process technologies and personnel associated with its SVTC business to the buyer. Cypress will remain an SVTC customer.

"With a recent shift in focus to a new mix of programmable products and solutions, Cypress now has very few products requiring 'bleeding-edge' technology, leading us to conclude that we can do R&D more cost-effectively as an SVTC customer than as an owner," said T.J. Rodgers, president and CEO of Cypress.

Located in Silicon Valley, California, SVTC provides fabless companies the facilities to develop their silicon-based technologies. Cypress began selling access to its San Jose R&D foundry in 2000 and formalized this approach to semiconductor services by creating SVTC in 2004.

According to J. Crandall, managing partner of Oak Hill, "We believe SVTC plays a valuable role in the semiconductor value chain. We are thrilled to provide resources that will allow SVTC's management to pursue their vision and provide a wider range of services and technologies to the fabless semiconductor community."

"Historically, innovation in the fabless semiconductor industry has been limited to device architecture and circuit design. Going forward, we believe that new semiconductor materials, processes and devices represent the new frontier in which rich innovation will occur. SVTC possesses the unique talent and capabilities to enable these new dimensions of innovation to come to fruition and makes them available to the creativity of fabless semiconductor companies," added Luis Arzubi, general partner of Tallwood Venture Capital.

Recently, Cypress was under pressure for a buyout as equity firms urge the company to reorganize itself and become a private company through leveraged buyout.

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