Jazz Semiconductor Inc. could make a big addition to its plant lineup.
The Newport Beach-based chip foundry is said to be interested in buying Milpitas-based LSI Logic Corp.’s plant in the Portland, Ore., suburb of Gresham, according to a report.
The company has declined to comment on the speculation.
Portland’s daily newspaper, the Oregonian, reported that LSI received letters of intent from one prospective buyer.
LSI would not identify the potential suitor, but the newspaper reported “people inside the semiconductor industry” said at least two chipmakers are interested in the plant.
The November article first named Jazz and also called out ON Semiconductor Corp., which is based in Phoenix and does contract manufacturing along with making its own chips.
LSI announced in September its intention to sell its Gresham plant as part of the company’s strategy to move to a fabless semiconductor model, according to filings with the Securities and Exchange Commission.
Fabless chipmakers, such as Irvine-based Broadcom Corp., design chips but contract out production to others.
LSI said it is shopping the plant and expects to close a sale by the end of 2006. The chipmaker said the plant’s assets were worth about $98.5 million, but added “current market conditions for the sale of older fabrication facilities and related equipment may fluctuate,” according to regulatory filings.
The facility has more than 500,000 square feet of space. The Oregonian said it employs about 550 workers.
Jazz makes chips for Newport Beach-based Conexant Systems Inc., which spun off Jazz in 2002. Jazz also makes chips for Mindspeed Technologies Inc. of Newport Beach,another Conexant spinoff,among other customers.
One analyst said she wasn’t surprised LSI is getting some lookers for the Gresham plant.
“It’s a fab that not only has (high) volume production ability, but some areas of research and development,” said Joanne Itow, managing director and analyst with Semico Research Corp. in Phoenix.
Jazz could use the plant to expand into its growing markets, including wireless and digital television.
“I think they’re definitely in the right markets,” Itow said.
Jazz is expected to hit the public markets,eventually. It first filed in 2004 for an initial public stock offering, but withdrew the registration this past summer.
Dwight Decker, chief executive at Conexant, which owns a big chunk of Jazz, has said he hopes to refile for a public offering, possibly this year.
Philips Spinoff?
Netherlands’ Royal Philips Electronics NV is giving Scott McGregor’s former business unit some more independence in a move that could signal a possible public stock offering or sale.
Philips said earlier this month it’s starting the process to create a separate legal structure for its semiconductor unit. McGregor, chief executive at Broadcom, led the Philips Semiconductors operation until shortly before his arrival at the Irvine chipmaker last year.
McGregor led the Philips chip unit for about three years. The division turned profitable in late 2003 after a string of losses during the technology downturn.
Following McGregor’s exit, Philips introduced a “business renewal” program to improve the unit’s profitability and boost market share in four key businesses: wireless, home, automotive and what it called “multimarket semiconductors.”
“We see opportunities to further strengthen the activities and maximize shareholder value, with the step we announced today, in an industry where scale matters,” said Gerard Kleisterlee, chief executive of Royal Philips, in a statement.
I Want My Amp’d!
Looks like the move north is paying off.
Amp’d Mobile Inc., a former Aliso Viejo-based company, has lined up $50 million in funding from Viacom Inc.’s MTV Networks unit, according to reports.
The deal calls for MTV and its sister stations to offer video clips, ring tones, screensavers and wallpapers on Los Angeles-based Amp’d’s wireless service.
Cable channels involved in the deal include Comedy Central, MTV, VH1, TV Land and Spike TV.
The companies also plan to develop original content, such as interviews, behind-the-scenes clips and other short-form video programming. MTV will make its digital music service available to Amp’d subscribers.
Amp’d was based in OC until the summer when it inked a separate $67 million venture funding deal. Funding came from Universal Music Group and venture capital investors Highland Capital Partners Inc. of Lexington, Mass., Columbia Capital of Alexandria, Va., and Menlo Park-based Redpoint Ventures.
The company moved to Los Angeles to be closer to the region’s entertainment hub, founder Peter Adderton said.
Amp’d aims to bring music and videos to 18- to 35-year-old cell phone users. The Amp’d Web site has featured short videos with names like “Ultimate cat fight,” “BMX meets concrete” and “Beer, beer, beer, beer.”
