II-VI Inc buys Kaiam’s 6” fab in UK for $80m

Engineered materials and optoelectronic component maker II-VI Inc of Saxonburg, PA, USA has acquired Kaiam Laser Ltd, a 6-inch wafer fabrication plant in Newton Aycliffe, UK, for $80m in cash reserves. The acquisition is expected to be breakeven at the EBITDA level within 12 months.

The 300,000ft2 facility has a 100,000ft2 cleanroom designed for high-volume manufacturing of compound semiconductor devices based on gallium arsenide (GaAs), silicon carbide (SiC) and indium phosphide (InP) materials.

“This facility hosts one of the best cleanrooms in the entire compound semiconductor industry and augments our capabilities at a time when industry capacity is rapidly becoming fully subscribed,” notes II-VI’s president & CEO Dr Chuck Mattera. “Given the demand we anticipate, this acquisition will allow us faster time to market than building a proprietary green-field site,” he adds. “It adds to our in-house capacity for VCSELs [vertical-cavity surface-emitting lasers], and is also as part of a broader strategic move to provide a versatile 6” wafer fab for GaAs-, SiC- and InP-based devices. This acquisition will significantly expand our capacity and is expected to enable us over time to penetrate high-growth markets driven by, for example, 3D sensing, 5G wireless, the electrification of the car, and data-center communications,” he adds.

Kaiam Laser’s parent firm Kaiam Corp of Newark, CA, USA – which is commercializing hybrid photonic integrated circuit (PIC) technology for pluggable optical transceivers in data-centers – acquired the fab from Compound Photonics Group Ltd in early May. “II-VI will be using this fab more effectively by leveraging its full capacity and multi-purpose use,” comments Kaiam’s CEO Dr Bardia Peseshki. “I am looking forward to working with II-VI to establish a commercial relationship that includes having II-VI provide InP-based epitaxial wafers and wafer fabrication services for our products as we continue to expand our transceiver business in the rapidly growing 100G and impending 400G datacenter markets.”

II-VI says that, as a part of its vertical integration strategy, it is expanding its VCSEL product family and leveraging its broad engineered materials and optoelectronic device technology platforms and manufacturing capabilities around the globe to drive scale and innovation through the development of compound semiconductor devices.