Last year, Infineon agreed to pay $850 million for Cree’s power and radio frequency business unit, Wolfspeed. But American officials refused to approve the deal and, after weakly toying with fixes and compromises, Infineon waved the white flag and pulled out of the deal.
Now both companies have hammered out a deal in the opposite direction, following Cree’s vow to aggressively invest in its Wolfspeed business through the end of the decade.
On Tuesday, Wolfspeed said that it had acquired Infineon’s radio frequency power business for about $430 million, bolstering its catalog of power amplifiers used in wireless infrastructure and radar. That includes chips manufactured with gallium nitride layered onto silicon carbide to handle the wider bandwidths and higher frequencies of 5G.
“The acquisition strengthens Wolfspeed’s leadership position in RF GaN-on-SiC technologies, as well as provides access to additional markets, customers and packaging expertise,” said Cree’s chief executive Gregg Lowe in a statement. The deal “positions Wolfspeed to enable faster 4G networks and the revolutionary transition to 5G.”
The deal encompasses Infineon’s factory for LDMOS and GaN technologies located in Morgan Hill, California. The facility also includes packaging and test operations. Wolfspeed will also take on around 260 employees from the Neubiberg, Germany-based Infineon, including more than 70 engineers.
For Wolfspeed, which generated $221 million of revenue last year and has shipped more than 15 million devices since Cree began targeting compound semiconductors at applications other than lighting, Infineon’s business is expected to add $115 million to its balance sheet in the first twelve months after the acquisition.