Semiconductor specialist IQE is acquiring the in-house epitaxy manufacturing unit of RFMD, a customer and supplier of RF components and semiconductor compound technologies. IQE is not paying any cash upf ront for the assets, but has agreed a seven-year supply agreement with RFMD, with a minimum purchase commitment of $55m (£35.5m) in the first two years.
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Analysts at Canaccord Genuity calculate this minimum purchase to equate to a 27 per cent increase in IQE's wireless revenues (which account for 70 per cent of group sales) over 2012 and 2013.
Moreover, RFMD's epi-wafer business has $35m of unallocated capacity that IQE plans to use for the concentrated photovoltaic solar market.
