Interface IC specialist Pericom Semiconductor, has over $100 million to spend on acquisitions and believes now is the time to spend it.

And its not the only one; Cypress Semi says it has $600 million to send on mergers and acquisitions.

"In 2000 we sold some shares and raised $100 million to do mergers and acquisitions but business was so good we didn't have time to look for targets," Alex Chi-Ming Hui, Pericom CEO, told Electronics Weekly. "Then the market became so bad we had to concentrate on trying to hold the business together. Now we're looking for opportunities."

Last year Pericom spent $10 million buying the crystal oscillator company Saronix, whose top customer is Cisco Systems.

Hui, who founded Pericom in 1990, has spent years building customer relationships with the biggest companies in the electronics industry: IBM, Intel, Sun, Lucent, Nortel, Dell, Toshiba, NEC, Philips and Sharp among others.

"We have a lot of tier one customers," said Hui. "It takes many years of effort to penetrate them. Companies may have great technology but not be able to penetrate these customers." Pericom feels it is an attractive potential acquirer because of its channels to the industry's major players.

Hui's acquisition target area is wide. "Buying a company is like adopting a child: you have to do it carefully," he said. "Our acquisition philosophy is no different from our hiring philosophy. We're looking for technical competence and matching chemistry."

In 2000 Pericom had revenues over $100 million, now it is on a $20 million-per-quarter run-rate. Through an agreement with RF specialist TCT it is into the Bluetooth business, but is avoiding WiFi.

Meanwhile, Cypress Semiconductor latest acquisition deal is rumored to be imminent and may be in Europe. "TJ Rodgers [CEO of Cypress] did a deal with Wall Street giving us $600 million at 1.25 per cent. We call it Big Bertha," Joe McCarthy, Cypress VP of communications, told Electronics Weekly.

Targets are companies which can add new products. "The acquisitions will focus on expanding products on the line card in key markets," said McCarthy. One applications area Cypress is thought to be looking at expanding in is mobile phones, possibly via analog and RF acquisitions.

Geographically the company is looking at purchases in the United States, Asia and Europe. It is all in pursuit of Rodgers' stated goal of achieving $1 billion per quarter by Q4 2005.

By: DocMemory
Copyright © 2023 CST, Inc. All Rights Reserved