KLA-Tencor, the No. 4 player in the semiconductor equipment market, on Thursday offered to buy ICOS Vision Systems Corp., a supplier of solar photovoltaic manufacturing equipment. ICOS has a lead in selling equipment that inspects solar cells and LED lights, and has recently signed several multimillion deals to put its inspection tools into unnamed solar manufacturing plants.
That explains the offer’s $465.6 million price tag. Making the equipment that makes chips is a grim business to be in. As chipmakers build fewer fabrication plants, there are fewer customers for the manufacturing equipment, so businesses such as KLA-Tencor and rival Applied Materials are looking for growth. Solar could be the key to that.
The process of making PV chips and solar panels is similar enough for equipment makers to feel comfortable snapping up smaller PV equipment makers. Applied, the industry leader, has spent about $1.4 billion buying companies in the solar space. In February the company closed its $334 million acquisition of Italy’s Baccini, a maker of metallization and testing equipment for photovoltaic solar cell production, and back in August, Applied completed a $483 million acquisition of Swiss solar wafer equipment company HCT Shaping Systems. KLA’s move suggest that Applied’s competitors might be trying to catch up.