IQE to acquire NanoGaN to accelerate commercialisation of advanced blue/green lasers and solid state lighting products
05 October 2009
IQE plc (AIM: IQE), the leading global supplier of advanced wafer products and wafer services to the semiconductor industry, is to acquire UK based NanoGaN Limited (“NanoGaN”).
NanoGaN has established a range of unique processes and key intellectual property relating to gallium nitride (GaN) materials and devices. This includes its proprietary Nanocolumn Technology for producing high quality, free-standing gallium nitride substrates, which are critical for manufacturing high quality blue and green semiconductor lasers and ultra high brightness LEDs for Solid State Lighting (SSL).
The development of NanoGaN’s proprietary technology is at an advanced stage. IQE will assist in completing the development of commercial products and will thereafter begin the transfer of the technology to its high volume production facilities where it is expected to begin generating sales in 2010, followed by rapid sales growth as the technology is commercialised.
The acquisition complements and enhances IQE’s existing product portfolio by accelerating the Group’s strategic plans to develop a leadership position in the emerging high growth markets for advanced laser projection, high definition optical storage (including Blue Ray products), high resolution laser printing and solid state lighting for industrial, commercial and residential lighting. NanoGaN’s core technology will also be used to further enhance IQE’s leading position in the supply of GaN products for high power RF applications.
The deal also strengthens IQE’s position as a technology leader by bringing powerful new intellectual property to the group, and exciting new talent. NanoGaN brings with it seven filed patents, and several additional innovations for which patents will be submitted.
As part of the deal, Professor Wang, the CEO of NanoGaN and inventor of the nanocolumn technology will become Chief Scientific Advisor to IQE. Professor Wang is widely acknowledged as a world leading advanced materials scientist with significant commercial and advisory experience. He was co-founder of Arima Optoelectronics Corporation, a leading optoelectronics company listed on the Taiwan Stock Exchange. Professor Wang has a history of successfully patenting innovative technologies. Many of his 26 granted patents continue to be used for mass production within the optoelectronics industry. He has also acted in advisory roles, including Scientific Advisor to the ITRI (Industrial Technology Research Institute) of Taiwan and to the Taiwanese Government.
The consideration for the acquisition of NanoGaN is for up to £3.6m, based on the achievement of milestones relating to the commercialisation of the intellectual property. The initial consideration of £0.4m will be settled by the issue of new shares and cash. IQE has the option to settle the future milestone payments in either shares or cash.
Completion of the acquisition will take place upon admission to trading of those new shares to be issued in satisfaction of part of the initial consideration, expected to be on or around 7 October 2009.
Commenting, Dr Drew Nelson, IQE Chief Executive Officer said :
“The acquisition of NanoGaN represents a major milestone in our technology roadmap, and reinforces our strategy of being a powerful IP based technology leader in the supply of advanced semiconductor materials to a multitude of high growth markets.
“This acquisition provides a perfect complement to our existing wireless and opto, and emerging solar businesses and widens our product portfolio.We now operate in a range of diverse international markets, all with powerful drivers including high growth consumer applications and political and legislative trends towards technological solutions to address environmental challenges
“Current trading across the group continues to be strong and the Board remains confident of meeting market expectations for the full year 2009.”
Commenting, Professor Wang Nang Wang said:
“NanoGaN has reached a very exciting stage of development. Our Nanocolumn technology provides a unique approach to overcoming the challenges facing the advancement of blue and green laser technology, high density optical storage and ultra high efficiency solid state lighting.
“This transaction represents a unique opportunity for the commercialising of NanoGaN’s world leading technology and cements our long term relationship with IQE. We carefully selected IQE as the ideal partner to bring our intellectual property to mass production based on its track record and its experience. In addition I am extremely excited to accept the position of Chief Scientific Advisor to the IQE Group, to help further advance their powerful portfolio of IP based production technology for advance semiconductor materials”
IQE plc (+44 29 2083 9400)
Noble & Company Limited (+ 44 20 7763 2200)
College Hill (+44 20 7457 2020)
NOTE TO EDITORS
About IQE (www.iqep.com)
IQE is the leading global supplier of advanced semiconductor wafers with products that cover a diverse range of applications, supported by an innovative outsourced foundry services portfolio that allows the Group to provide a 'one stop shop' for the wafer needs of the world's leading semiconductor manufacturers.
IQE uses advanced crystal growth technology (epitaxy) to manufacture and supply bespoke semiconductor wafers ('epi-wafers') to the major chip manufacturing companies, who then use these wafers to make the chips which form the key components of virtually all high technology systems. IQE is unique in being able to supply wafers using all of the leading crystal growth technology platforms.
IQE's products are found in many leading-edge consumer, communication, computing and industrial applications, including a complete range of wafer products for the wireless industry, such as mobile handsets and wireless infrastructure, Wi-Fi, WiMAX, base stations, GPS, and satellite communications; optical communications, optical storage (CD, DVD), laser optical mouse, laser printers & photocopiers, thermal imagers, leading-edge medical products, barcode, ultra high brightness LEDs, a variety of advanced silicon based systems and high efficiency concentrator photovoltaic (CPV) solar cells.
The manufacturers of these chips are increasingly seeking to outsource wafer production to specialist foundries such as IQE in order to reduce overall wafer costs and accelerate time to market.
IQE also provides bespoke R&D services to deliver customised materials for specific applications and offers specialist technical staff to manufacture to specification either at its own facilities or on the customer's own sites. The Group is also able to leverage its global purchasing volumes to reduce the cost of raw materials. In this way IQE's outsourced services, provide compelling benefits in terms of flexibility and predictability of cost, thereby significantly reducing operating risk.
IQE operates six manufacturing facilities located in Cardiff (two) and Milton Keynes in the UK; in Bethlehem, Pennsylvania and Somerset, New Jersey in the USA; and Singapore. The Group also has 11 sales offices located in major economic centres worldwide.
About NanoGaN Limited (www.nanogan.com)
NanoGaN is a venture formed between Professor Wang Nang Wang, Bath University and a number of financial backers. NanoGaN’s IP includes its proprietary Nanocolumn Technology as a means of developing high quality Free Standing Gallium Nitride substrates which are critical for blue and green laser technology, and ultra high brightness LEDs.
In addition to a distinguished academic career, Professor Wang has established a solid business reputation within the technology sector having served as Chairman and President of Quantum Optech Inc and as co-founder of Arima Optoelectronics, both based in Taiwan.
IQE has enjoyed a long standing association with NanoGaN having been selected as a key strategic epitaxial materials partner by Professor Wang. The development of NanoGaN’s unique Nanocolumn technology is at an advanced stage and is expected to generate initial sales during 2010, followed by rapid sales growth as the commercialisation is completed.
In conjunction with this acquisition, IQE is pleased to announce that Professor Wang has accepted appointment as Chief Scientific Advisor to the IQE Board. This is detailed in a separate announcement.