KLA-Tencor Buys Ultrapointe from Uniphase
By: Krstin Lewotsky
For the past several years, optoelectronics and laser manufacturer Uniphase has been increasingly focusing its business on the telecommunications industry. In a continuation of this process, Uniphase has sold the assets of its Ultrapointe semiconductor metrology subsidiary to KLA-Tencor Corp. for an undisclosed cash sum. Uniphase anticipates a non-recurring charge on the disposition of these assets of $3 million in the quarter ended Dec. 31, 1998.
What it means
Although legalities prevented the deal from being an outright acquisition of the subsidiary, to all intents and purposes, KLA-Tencor will now own Ultrapointe "lock, stock, and barrel," in the words of KLA-Tencor VP of corporate communications Roberta Emerson. The deal covers intellectual property, patents, and inventory for the subsidiary's confocal laser review station (CRS) product, which is used to analyze defects on silicon wafers during the semiconductor manufacturing process.
Under prior agreements, KLA-Tencor has served as the exclusive OEM reseller for the Ultrapointe CRS since 1995. By buying the Ultrapointe assets, KLA has effectively removed Uniphase from the loop. "We will now be better positioned to link the CRS with our other wafer inspection products, said Scott Landstrom, VP and general manager of the Defect Review and Classification division of KLA-Tencor. The company will technically have the rights to use the Ultrapointe name, but according to Emerson, KLA-Tencor will most likely stick with the CRS model name.
The Ultrapointe holdings are slated to be folded into the existing KLA-Tencor organization. "There's a transition period during which they'll be operating here," says Uniphase vice president and CFO Anthony Muller. Over time, Ultrapointe operations will shift from Uniphase headquarters in San Jose to one of the nearby KLA facilities. No personnel or management changes are planned at present.
Why divest?
"It's in the interest of our shareholders that we devote all attention to non Ultrapointe business of the company," says Muller. "Telecom and cable are extraordinary growth opportunities," he adds, noting that Ultrapointe generated only 10.8% of the $176 million in revenues that Uniphase reported for fiscal year 1998 (ended Jun. 30), whereas the telecommunications business produced the bulk of the remainder.
Indeed, telecommunications technology has become the mainstay of Uniphase's business. "There was a time when Ultrapointe played that role," says Muller. "We went public in 1993 as a semiconductor equipment company. That IPO gave us the money to buy our first telecom business," he adds, referring to the UTP acquisition in 1995 that launched Uniphase's telecom business. "Ultrapointe played a very important role in the history of Uniphase."