BluGlass Limited (ASX: BLG) has agreed to acquire GaNWorks Foundry, Inc. (GaNWorks), its commercial contract manufacturing partner, for US$800,000. This acquisition will involve obtaining core gallium nitride (GaN) wafer processing equipment and processes from GaNWorks, marking the completion of vertical integration of its Silicon Valley laser fabrication facility (the Fab).
The acquisition encompasses specialty GaN wafer processing equipment for n-side wafer thinning and laser bar cleave capabilities, which are crucial and intricate processes in BluGlass’ laser manufacturing supply chain. Previously, these processes were outsourced to GaNWorks, the only remaining wafer processing contract manufacturer for BluGlass, based in Silicon Valley.
In addition to the equipment and installation, the acquisition includes the transition of an experienced GaN engineer to ensure complete knowledge and process transfer to BluGlass. Bringing these processes in-house is expected to accelerate development and production cycles by over 30%, resulting in annualized savings of more than US$400,000. Vertically integrating these processes will also facilitate the company’s growth strategy, increase laser production capacity, and expedite advanced technical roadmaps.
BluGlass’ CEO Jim Haden emphasized the significance of the strategic acquisition, stating that it represents exceptional shareholder value by providing the necessary equipment, process knowledge, and hands-on expertise. This move also enhances the company's competitive position in the global gallium nitride laser diode market and supports its long-term growth plans within the fast-growing GaN market, which is projected to reach US$2.5 billion by 2025.
The agreement outlines the purchase of GaN laser diode n-side metalization, wafer thinning, and laser bar cleave fabrication equipment and processes, with these assets to be installed on-site at BluGlass’ Silicon Valley fab by 30 December 2023. GaNWorks will provide transitional engineering services for 30 days from the acquisition date to complete the process and knowledge transfer to BluGlass. Additionally, a seasoned engineer with over 10 years' GaN processing experience will be transitioned to BluGlass’ Fremont fab.
The purchase price of US$800,000 includes a cash component of US$120,000 and 17,436,556 new BLG shares valued at US$680,000. The cash component is funded by the receipt of the company’s $7.3 million R&D rebate. The equipment is scheduled for installation and process transfer completion by 30 December 2023.
