AlliedSignal Buys JME

-- Semiconductor International, 8/1/1999

AlliedSignal Inc. (Los Gatos, Calif.) is buying Johnson Matthey Electronics (JME, Eden Prairie, Minn.) in an effort to reposition its electronic materials business. The $655M purchase was fueled by AlliedSignal's sale of its Laminate Systems business to Rütgers AG for $425M.

Johnson Matthey Electronics, a division of Johnson Matthey Plc. (London), supplies materials to semiconductor and microelectronics firms, and posted sales of $671M in the year ended March 31. Through the combination of its electronic materials business with JME, AlliedSignal plans to offer interconnect material technology from wafer fabrication through semiconductor packages.

'Divesting Laminate Systems removes us from the lower-margin laminate industry, and acquiring Johnson Matthey Electronics supports our business strategy to enter additional higher-margin specialty segments,' said Lawrence A. Bossidy, AlliedSignal chairman and CEO.

Geoffrey Wild, president of AlliedSignal Electronic Materials, said the move gives AlliedSignal entree to the growing high-density interconnect industry and makes 'Electronic Materials nearly a $1B provider of high-technology solutions to a fast-growing industry.'

AlliedSignal also opened a new $30M low-k integration facility in Sunnyvale, Calif. The certified Class 10 cleanroom, opened in July, features low-k spin coaters, curing equipment and film characterization tools, as well as CMP, etch, CVD and strip modules. It does not have lithography capabilities. Jack Bolick, vice president and general manager of AlliedSignal Wafer Fabrication, said his company can help do development work and characterize materials through to the packaging level.

Separately, AlliedSignal Electronic Materials announced a joint cooperation agreement with Tokyo Electron Ltd. (TEL) to develop materials and processes for spin-on deposition of low-k materials. As part of the alliance, AlliedSignal purchased TEL's low-k tool set, which includes an ACT 8 SOD coater, an Alpha-8SE low-k annealing system, and a Unity II etcher. These tools will be installed in the new integration facility.

Last month, AlliedSignal and Honeywell Inc. announced plans to merge into a single company. The combined company, with revenues of $25B, eventually is expected to use the Honeywell name, according to Wild.