Term Sheet Covering Manufacturing, Product Sales and Equipment
MILPITAS, Calif., Sept. 1 /PRNewswire-FirstCall/ -- Today Sipex
Corporation (Sipex) announced the signing of a term sheet outlining a planned
strategic relationship with Hangzhou Silan Integrated Circuit Co., Ltd
(Silan-IC). As part of this planned relationship, Sipex announced plans to
close its Milpitas wafer fabrication operations. The products currently
manufactured in the Milpitas fab will eventually be manufactured in Silan-IC's
facility located outside of Shanghai, China. Silan-IC will also acquire a
substantial portion of the equipment of the Sipex fab.
"It is with both excitement and sadness that I make this extremely
important announcement regarding the future of our Company. Our Milpitas fab
has made significant operational improvements over the last few years.
However, our product needs and the process capability of this fab are no
longer aligned. Therefore, it is not economically feasible to keep the fab
operational," explained Ralph Schmitt, CEO of Sipex. "The sacrifices made by
the people we expect to lay off due to this strategic manufacturing transition
are greatly appreciated by me and by our stockholders. We will need their
continued support and cooperation in order to properly meet our customers'
needs during the transition period."
Upon the execution of definitive agreements, Sipex's current Bipolar and
BiCMOS processes will immediately start to be transferred to Silan-IC. The
Company expects the transition to take 9 to 12 months. Sipex further expects
to license certain products to enable Silan-IC to sell in the greater China
marketplace. "This relationship is the start of the new reality of our
business as China becomes a significant manufacturer and procurer of analog
products," said Schmitt. "We need a new progressive model to be successful in
the fastest growing market in the world." Sipex and Silan-IC also expect to
cooperate in product designs in the future.
"We wanted to have a true strategic relationship and not just a foundry
partner. We selected Silan-IC due to the many synergies in our businesses and
products. They are the fastest growing IDM in China with significant resources
to augment what already exists at Sipex." commented Brian Hilton, Chairman of
the Board for Sipex.
"Sipex will help Silan-IC continue to build its position in China. We have
great synergies in power and optical products," said Mr. Fan Wei-Hong, General
Manager of Silan Integrated Circuits Co., Ltd. "We help Sipex solve an
immediate manufacturing issue while enabling us with new process technologies
and products. This is truly a win-win situation. We have already discussed
further collaborative efforts that will make this a true long-term
partnership."
The Company anticipates recording restructuring and asset write-down
charges in connection with the Milpitas fab closure. Additional information
on these charges will be forth-coming in the Company's future SEC filings.
The relationship with Silan-IC is still subject to the successful
negotiation of definitive agreements, transfer of Sipex's process technologies
and the successful qualification of such processes and wafer testing.
About Sipex
Sipex Corporation is a semiconductor company that designs, manufactures
and markets high performance, value-added analog integrated circuits (IC).
Sipex serves the broad analog signal processing market with interface, power
management and optical storage ICs for use in automotive, portable products,
computing, communications, and networking infrastructure markets. The Company
is headquartered in Milpitas, CA with additional offices in Belgium, Canada,
China, Germany, Japan, and Taiwan. Sipex sells products direct and through its
distribution channels. For more information about Sipex, visit
http://www.sipex.com.
About Silan-IC
Hangzhou Silan Integrated Circuits Co., Ltd., a company incorporated in
Xiasha Economic &Technology Development Area, Hangzhou, China ("Silan-IC"), is
specialized in wafer manufacturing. Silan-IC manufacturers BiPolar and BiCMOS
technologies in two wafer FABs with a total clean room area of more than
10,000 square meters.
Cautionary Statement Regarding Forward-Looking Statements
Certain statements in this communication regarding the proposed
transaction between Sipex and Silan-IC, including the expected benefits of the
transaction, future opportunities for Sipex, the manufacturing of its
products, the timing of the transition of its manufacturing operations to
Silan-IC, the success of Sipex's new strategy, the expected synergies in the
companies' businesses and products and any other statements regarding Sipex's
or Silan-IC's future expectations, beliefs, goals or prospects constitute
forward-looking statements. Any statements that are not statements of
historical fact (including statements containing the words "believes,"
"plans," "anticipates," "expects," "estimates" and similar expressions) should
also be considered forward-looking statements. A number of important risks and
other factors could cause actual results or events to differ materially from
those indicated by such forward-looking statements, including the risk that
the parties' may fail to successfully negotiate and execute definitive
agreements on mutually acceptable terms; the possibility that the parties may
not consummate the transaction as scheduled and planned; that conditions to
the completion of the transaction may not be satisfied or that regulatory
approvals required for the transaction may not be obtained on the terms
expected or on the anticipated schedule; the possibility that the parties may
be unable to achieve all or any of the expected benefits of the relationship
within the anticipated time-frames or at all; the risk that the expected
synergies between Sipex and Silan-IC may not be as significant as currently
anticipated; the possibility that manufacturing processes and wafer testing
may not be qualified following the transfer from Sipex to Silan-IC; the risk
that Sipex and Silan-IC may not be able to successfully negotiate terms on
which Sipex will license products to Silan-IC; the possibility that the market
for Sipex products in China may not grow as rapidly or as large as the parties
currently anticipate; the possibility that operating costs, customer loss,
transition times and business disruption (including, without limitation,
difficulties in maintaining relationships with employees, customers, clients
or suppliers) may be greater than expected following the transaction; and the
other factors described in Sipex's publicly filed reports on Forms 10-K and
10-Q. Sipex assumes no obligation to update the information in this
communication, except as otherwise required by law. Readers are cautioned not
to place undue reliance on these forward-looking statements that speak only as
of the date hereof.
For Further Information Contact:
Ralph Schmitt
Chief Executive Officer and Member of the Board of Directors
Phone: 408-934-7500
Fax: 408-935-7600
SOURCE Sipex Corporation
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Related links:
http://www.sipex.com
Company News On-Call:
http://www.prnewswire.com/comp/111683.html
CONTACT:
Ralph Schmitt, Chief Executive Officer and
Member of the Board of Directors of Sipex Corporation,
+1-408-934-7500, or Fax, +1-408-935-7600
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