Microsemi Corp., a maker of high performance analog mixed signal integrated circuits, says it will vigorously defend itself against a Department of Justice antitrust lawsuit claiming Microsemi's July $25 million cash acquisition of competitor Semicoa has resulted in a monopoly.
Microsemi Corp. said Dec. 19 it would vigorously defend
itself against an antitrust lawsuit filed by the Department of Justice claiming
Microsemi's $25 million cash acquisition of Semicoa eliminated or reduced
competition in the development, manufacture and sale of semiconductor devices
used in military and space programs.Microsemi, of Irvine, Calif., makes high performance
analog mixed signal integrated circuits and high reliability semiconductors. In
July Microsemi announced it was acquiring Semicoa, which specializes in
semiconductors and smart munitions optoelectronics as well as analog mixed
signal integrated circuits.
The DOJ antitrust complaint alleges the acquisition
created a monopoly for small signal transistors that meet Department of Defense
standards. The complaint also claims the deal reduced from three to two the
number of likely competitors for ultrafast recovery rectifier diodes that meet
"Critical military and aerospace systems used by the
Department of Defense and NASA depend on the performance of the small signal
transistors and ultrafast recovery rectifier diodes at issue," Deborah A.
Garza, the acting assistant attorney general for the DOJ's Antitrust Division,
said in a Dec. 18 statement. "The department brought this lawsuit to
restore to customers the benefits of competition in both pricing and responsive
and timely delivery of these vital components."Garza said that while consolidation within the defense
industry can be beneficial, the Microsemi-Semicoa deal would result in
"higher prices, lower quality of service and increased supply
vulnerability."The DOJ is asking the court to require Microsemi to undue
the merger by selling off its Semicoa assets. The DOJ also intends to seek
preliminary relief to preserve the Semicoa assets pending a trial of the DOJ's
claims. Semicoa is located in Costa Mesa, Calif.
In addition, the DOJ complaint claims that after Microsemi
acquired Semicoa, Microsemi significantly raised prices on small signal
transistors certified by the Department of Defense. According to the DOJ,
industry participants depend on the DOD certifications for electronic components
used in space, military and commercial applications.Microsemi said Dec. 19 that for calendar year 2007,
the last full calendar year preceding the 2008 acquisition of the Semicoa
assets by Microsemi, the revenues generated by the Semicoa from the sales of
the products covered in the complaint were approximately $8.3 million.
Microsemi's 2008 fiscal year revenues were $514.1 million.