MXIM: Maxim Opts to Buy, Rather Than Build, Capacity

From William Trent, CFA of Stock Market Beat

Maxim Announces Acquisition of Wafer Fab Facility in Irving, Texas:

Maxim Integrated Products, Inc., (MXIM) announced that it has acquired a wafer fabrication facility in Irving, Texas from Atmel for approximately $38 million. The facility, located on approximately 39 acres, is comprised of approximately 622,000 square feet of clean room and office space. Approximately 60,000 square feet is currently clean room space with the capability of expanding to 100,000 square feet.

$38 million is far less than the cost to build a new fabrication plant. Because the analog chips made by Maxim do not require the latest and greatest in semiconductor equipment, Maxim is able to buy its facilities from the cutting edge manufacturers who can no longer make use of them.

Vijay Ullal, Group President at Maxim, commented, “This facility puts us in an excellent position for future capacity requirements. It is capable of 20,000 eight inch wafer starts per month with the capability of expanding to over 30,000 wafer starts per month. The scale and construction of this facility will enable Maxim to bring on line capacity down to the 0.18um node with low cost and short cycle time with high yields.”

Most of the memory chips and other cutting-edge facilities are using 12-inch wafers and 0.06um geometries. While such manufacturers find the facility ancient, Maxim is able to swoop in and bring it a new lease on life. In our experience, Maxim’s fab purchases have typically generated solid return on investment.

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