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And then there were four?
August 16, 2005
The semiconductor test industry may have one fewer player soon, depending on the disposition of the Agilent Technologies' ATE divisions--specifically, its SOC and memory test businesses--which the company announced it wants to spin off "as soon as practical in 2006." The reason? The company believes investors look askance at anything with the word "semiconductor" involved.
Consequently, the semiconductor test businesses will follow out the door two other divisions: the Semiconductor Products segment, which Agilent is selling to Kohlberg Kravis Roberts & Co. and Silver Lake Partners for $2.66 billion, and its portion of the Lumileds LED business, with Agilent is selling to Royal Philips Electronics for $950 million (plus repayment of $50 million of debt from Lumileds).
The Wall Street Journal reports that Kohlberg Kravis and Silver Lake said they plan to establish the semiconductor products segment as a privately held, independent concern. Dick Chang, president of the Agilent semiconductor business, will serve as president and chief executive of the new company, the Journal reports.)
The fate of the ATE business isn't clear at this point, with most observers agreeing that the world needs fewer, not more, big-iron ATE makers (including Advantest, Credence Systems, LTX, and Teradyne). Can the Agilent ATE business go it alone, or will a cash-strapped competitor find a way to fund an acquisition?
And how will Agilent itself fare as a "pure test-and-measurement play," no longer bogged down by the "semiconductor" label? Investors may come to realize that most of the items being tested and measured by Agilent equipment have semiconductors in them.
Posted by Rick Nelson on August 16, 2005 | Comments (3)
