Emcore Sells TurboDisc Division to Veeco
November 3, 2003...Signaling the end of an industry era and potentially heralding the entry into the next (see editorial, this issue), Emcore Corporation of Somerset, New Jersey USA and Veeco Instruments of Woodbury, New York USA officially made it known that Emcore's TurboDisc MOCVD tool division and related R&D functions will now become part of Veeco's growing compound semi offerings. Veeco paid $60 million in cash for the net assets of the MOCVD business unit of Emcore and the transaction also includes a two-year earn-out feature that would require payment of up to an additional $20 million if future revenue targets are achieved. Emcore's MOCVD revenue was $51.1 million for the trailing twelve months ended June 30, 2003. The purchased MOCVD business includes those of Emcore's assets necessary for engineering, design and manufacturing of the full range of TurboDisc systems ranging from R&D to high-volume production systems, plus Emcore's manufacturing facility and applications lab in Somerset, New Jersey as well as related intellectual property. Approximately 120 Emcore employees are involved in the TurboDisc business and will become employees of Veeco.
Emcore introduced the first MOCVD tools to the commercial marketplace in 1984 when the company was first founded as a spinout by former Bell Labs researchers. It stayed with that focus until the company changed management in 1995 after which it went public on the Nasdaq (EMKR) under the direction of Reuben F. Richards Jr., Emcore's President and CEO, and Tom Russell, Emcore's Chairman. From that turning point on, Emcore has grown slowly and concertedly, moving upward in a vertical direction, offering not only its traditional and innovative line of MOCVD epitaxial growth tools, but a progressively broadened product offering that includes epitaxy materials and various components and subsystems for the communication industry. Emcore is noted now for their advanced solar cells for satellite communication, and because of their acquisition last January of Agere's Ortel group, Emcore is firmly entrenched now in optical transceivers. In addition, Emcore also continues to be the co-parent of GELcore, its advanced LED-related joint venture with GE Lighting.
The selling of Emcore's TurboDisc division is being viewed by compound semi industry insiders as huge news because of the change it represents, and overall, a positive step for Emcore as the sell-off will likely allow Emcore to focus its resources more concertedly on its material and device work. And the purchase of Emcore's TurboDisc division by Veeco is being viewed as an equally positive step for the overall equipment buyer/user community as Veeco's ownership equates to the potential fortification of TurboDisc tool technology and helps assure its future development, especially as it relates to GaN tool innovation for the production of blue spectrum LEDs and laser diodes, as well as TurboDisc tools for the growing variety of other types of laser diodes. We look forward to hearing more details as the two companies sort through their new structures. Emcore's Reuben Richards, and Veeco's David Reamer will both be feature senior managers at Gorham's 9th Annual Compound Semi Outlook Conference in Dallas, December 15-17. Dave Reamer is co-chairing the event with TriQuint's Ralph Quinsey. The December meet will provide an opportunity for attendees, which traditionally includes the key industry senior management and analysts, to hear more details of what the transfer of TurboDisc means to both companies and to the industry as a whole. Emcore release and Veeco release.
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