2 Chip Manufacturers Agree to Merge
GigaBit Logic and TriQuint Semiconductor said Wednesday that they plan to merge, forming the nation’s largest producer of gallium arsenide semiconductors.
Gallium arsenide chips--made with gallium, a soft metallic element, and arsenic--are faster and more powerful than the conventional silicon-based semiconductors that power everything from computers to satellites.
GigaBit is a privately held concern based in Newbury Park with investors that include such technology powerhouses as Digital Equipment and Analog Devices. TriQuint is a unit of Tektronix Inc., an electronic instruments company based in Beaverton, Ore.
Under the proposed merger, Tektronix, Digital Equipment and the other investors would simply shift their equity interests to share ownership of the newly merged company, which would keep the TriQuint corporate name and market a line of chips under the GigaBit brand.
The companies declined to say who would become the new company’s biggest stockholder, although Tektronix is a probable candidate because it now owns all of TriQuint. The companies also hope to have an initial public stock offering after the merger, GigaBit President Spencer J. Brown said.
TriQuint is considered by some analysts to be the nation’s biggest gallium arsenide chip maker. Neither company would disclose its annual sales, but analysts place TriQuint’s at about $25 million and GigaBit’s at about $15 million.
When gallium arsenide chips emerged in the early 1980s, they were expected to revolutionize the chip industry but never did. Among other things, gallium arsenide turned out to be much more difficult to handle than silicon in making chips. Combined sales for all gallium arsenide producers last year totaled about $100 million, a fraction of the sales originally envisioned.
The proposed GigaBit-TriQuint merger illustrates how the gallium arsenide makers, knowing now that they won’t replace silicon, hope to become big enough to at least establish a solid position in the chip market. “As a merged company, we’ll be able to focus our resources better,” TriQuint President Alan Patz said in an interview.
