Veeco to Buy FEI In $989 Million Chip-Gear Deal
Veeco Instruments Inc., a maker of micromanufacturing gear, agreed to purchase FEI Co. for just under $1 billion in stock, signaling further consolidation in the semiconductor-equipment market.</br></br>The deal, expected to be announced this morning, marks the latest in a string of acquisitions for Veeco, Woodbury, N.Y., and gives the company a larger presence in the business of microscopic measurement systems used to make semiconductors, data-storage devices and other electronics products.</br></br>Like the chip business itself, makers of related production equipment have been whipsawed by the volatile swings in the industry due to excess manufacturing capacity. Lately, shares of most companies in the field, including Veeco and FEI, have been hurt by fears that a rebound driven by expected chip demand will be slower than expected.</br></br>The deal is designed, in particular, to consolidate the companies' position in the emerging field of metrology -- equipment used to measure the microscopic layers of metals and other materials on chips, disk drives and other products.</br></br>The combination of Veeco and FEI, based in Hillsboro, Ore., will create the sixth-biggest maker of semiconductor-manufacturing equipment in the U.S., with more than $825 million in revenue. Applied Materials Inc. remains the industry leader, with $5.9 billion in revenue. Eager to take on the the top five players, Veeco has made 11 acquisitions or technology investments over the past five years.