|
Silicon Systems, Inc. 14351 Myford Road Tustin, California, USA
Reader Contact:
|
TEXAS INSTRUMENTS TO ACQUIRE TDK'S SUBSIDIARY SILICON SYSTEMS INCORPORATED (SSi) Move Enhances Position in Hard Disk
Drive and Emerging TOKYO (JUNE 5, 1996) TDK Corporation of Japan, through its U.S. Subsidiary TDK U.S.A. Corporation ("TDK"), and Texas Instruments Incorporated (NYSE:TXN) today announced the signing of a Stock Purchase Agreement by which TI would acquire TDK's U.S. semiconductor subsidiary, Silicon Systems, Inc. (SSi). The acquisition strengthens TI's position in DSP solutions and the mixed-signal/analog marketplace, and firmly establishes TI as a leading supplier of semiconductor products to the hard-disk drive and removable data storage markets. Total purchase consideration at closing will be approximately $US575 million, payable as a combination of cash and long-term note to TDK. In addition, the agreement includes potential contingent payments of up to $US50 million based on future performance of the business. The cash portion of the purchase price will be financed on an interim basis using short-term financing in addition to existing cash on hand. TDK and TI expect to close within the next two months, following appropriate regulatory approvals. SSi's Communications Product Division and TDK Systems Division (TSD) are not part of the transaction. "This acquisition combines TI's digital signal processing solutions leadership, manufacturing capacity and process technology with SSi's analog/mixed signal expertise," said Tom Engibous, TI executive vice president and semiconductor group president. "It specifically meets the needs of the mass-storage industry which requires high-volume, semiconductor technology partners to provide greater levels of density, integration and performance, ultimately resulting in more cost-effective solutions. It helps our customers meet their time to volume requirements with superior products." SSi Executive Vice President and Chief Operating Officer Rick Goerner added: "Today's announcement is good news for our customers as we will now have access to TI's high volume, global manufacturing network and advanced process technologies. We're also pleased that TI will retain SSi's innovative culture, which has created an impressive array of products for the hard-disk drive and removable storage markets.": Upon closing, SSi will become a wholly-owned subsidiary of TI, remaining in Tustin, California, and primary operations located in Santa Cruz, California, including a six-inch, submicron wafer fabrication facility. The company's assembly and test facility is located in Singapore with research and design sites in California, Colorado, Singapore and Tokyo. Silicon Systems was acquired by TDK in 1989. Texas Instruments Semiconductor Group employs more than 31,000 people, with sales or manufacturing location in more than 30 countries worldwide. Market Background Information The 1996 market outlook for hard-disk drives remains strong. International Data Corporation (IDC) reports 1995 actual shipments of 89 million units, an increase of 30 percent over 1994. By the year 2000, 231 million units are expected to be sold. In the fast-growing removable storage market, the acquisition will enhance SSi's and TI's combined presence in Japan and strengthen its position for next-generation mass-storage products. Removable storage is defined as products with storage media that can be removed from the equipment which read/(writes) data from/(to) the media itself. Examples include CD-ROMs magneto-optical drives (MOD), and digital video disks (DVD). There are many similarities in the products needed for HDD and removable storage, particularly read/write pre-amplifiers, read channels, servo-motor drivers, and interface controllers. The acquisition will provide complementary design and system expertise, and build on a strong initial position in MOD and DVD. SSi and TI Japan also have well established relationships with the manufacturers in the optical removable storage industry which is concentrated in Japan. TDK Corporation is a leading global manufacturer of electronic materials and components, as well as recording media. The company's technological skills have resulted in a broad lineup of products that are core ingredients in such high-potential markets as computers, telecommunications, home entertainment and many others. International presence is a key strength: much of TDK's production takes place outside of Japan, and overseas markets now account for more than half of total sales. Silicon Systems specializes in the design and manufacture of application specific, mixed-signal ICs used in storage and communications products. The company designs, manufactures and ships in volume ICs for every function in drive electronics. |