Chipmaker Cypress launches packaging venture

Wed Nov 9, 2011 12:24am EST

* New venture aims at efficient chip packaging

* Deca follows path of SunPower

* SunPower contributes IP

By Noel Randewich

WOODSIDE, Calif, Nov 8 (Reuters) - Cypress Semiconductor founder TJ Rodgers unveiled a new chip packaging venture that he expects will improve on existing technology by ten times and which he hopes will lead to a future stock market spin-off.

Cypress, whose touchscreen technology is widely used in smartphones, including Samsung's Galaxy lineup, is launching Deca Technologies with an investment of about $35 million, Rodgers told reporters late on Tuesday.

The new subsidiary is part of Cypress's Emerging Technology Division, while one-time Cypress subsidiary SunPower has contributed intellectual property and factory space and holds a minority stake along with key employees.

Wafer-level packaging relates to putting the final touches on integrated circuits before manufacturers slice the silicon wafers on which they are made into individual chips.

"You take the finished wafer from Cypress or another semiconductor company and you create the package while it's still a wafer," said Deca chief executive Tim Olson. He said the wafer level packaging market is currently worth about $1 billion a year.

FOLLOWING SUNPOWER'S FOOTSTEPS

Formerly a Cypress subsidiary, solar developer SunPower held an initial public offering in 2005, with Cypress spinning out its remaining SunPower shares in 2008.

"I'd like to do exactly what SunPower did and have them become very successful, take them public and spin them off," Rodgers told reporters at a preview of Deca given at his home.

Improved packaging aims to reduce the amount of space microchips take up and reduce manufacturing costs.

"Over the next five to 10 years packaging will become an increasingly relevant contributor to Moore's law, especially if you can package together different flavors of silicon ... like CPUs, memory, flash, radio frequency stuff and analog," said Real World Tech analyst David Kanter.

Cypress has swiftly gained share in the booming market for touchscreens and, along with Synaptics and Atmel , controls 90 percent of the business.

San Jose, California-based Cypress also makes specialized memory and programmable chips used in cars, computers and military systems.

Last month, Cypress, which also supplies to Acer Inc and Fujitsu , warned revenue would dip in the current quarter as a slow economy weighs on demand from electronics manufacturers.

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