Intersil Sells Discrete Power Business to Fairchild Semiconductor
Intersil Corp. (Palm Bay, FL) has signed an agreement to sell its discrete power business to Fairchild Semiconductor International (Sunnyvale, CA) for about $338 million in cash. Intersil expects a one-time gain during the first quarter and plans to use proceeds for acquisitions, alliances and product development. Fairchild estimates that the combination of its power MOSFET business and Intersil products will give it an overall market share of about 20 percent, and claims that it will make Fairchild the second-largest power MOSFET supplier in the $3 billion worldwide market.
“With this acquisition, we will have quadrupled our discrete business in less than four years, with a run rate today of roughly $1 billion a year," said Kirk Pond, president, chairman and CEO of Fairchild. “The Intersil discrete power business is profitable, generating more than $200 million in sales per year. We believe Fairchild can grow this business at or above market rates, while increasing gross margins to levels consistent with our other power businesses."
Fairchild also said that the purchase will better position Fairchild in the automotive engine and ignition control markets with an expanded IGBT product line as well as boost its worldwide presence in industrial power markets. Furthermore, the addition of the Intersil business will mark the company's entry into the aerospace market with power applications for satellites and supporting systems.
Intersil President and CEO Greg Williams commented, “The sale of the discrete power business completes our transition to a communications company and allows us to focus our resources and energy on wireless access and communications analog, two of the fastest-growing segments of the semiconductor industry today."
The acquisition is expected to close in the first quarter and will be accretive to Fairchild's earnings this year.