$65M deal for Epiluvac drives Veeco of Plainview into electric-vehicle market

Semiconductor equipment maker Veeco Instruments Inc. has acquired a Swedish company for up to $65 million in a transaction aimed at giving it traction in the electric-vehicle components market.

The deal for Epiluvac AB, announced Wednesday, calls for Plainview-based Veeco to pay $30 million cash at closing and up to $35 million in performance-based payments.

Epiluvac, based in Lund, a city in southern Sweden, designs and manufactures tools used to build silicon carbide semiconductors.

“The Epiluvac team has developed a superior platform and process know-how aligned with markets that are a great strategic fit for Veeco,” Bill Miller, Veeco’s chief executive, said in a statement.

The technology of the Swedish company allows it to produce systems enabling "lighter, smaller and more efficient power-conversion systems," he said.

Silicon carbide chips, which can better handle higher temperatures and voltages than standard silicon semiconductors, are widely used in electric vehicle systems for charging the battery and controlling the flow of electricity to and from the battery.

The market for silicon carbide devices is projected to compound annually at a rate of about 30% from 2023 through 2027, according to Yole Group, a market research firm based in France, and the equipment to manufacture silicon carbide semiconductors is forecast to grow at a compound rate of about 15% annually in the same time frame.

Veeco sells equipment used in making semiconductors, light-emitting diodes (LEDs), displays and hard disk drives. The company's research and manufacturing facilities are in: San Jose, California; Horsham, Pennsylvania; Somerset, New Jersey; St. Paul, Minnesota; Waltham, Massachusetts, and Plainview. 

Privately held Epiluvac, founded in 2013, has 11 employees. The acquisition is not expected to materially affect Veeco's 2023 financial results, the company said.

Highlighting the importance of silicon carbide to automakers, last month German automaker Volkswagen AG announced a partnership with chipmaker On Semiconductor Corp. (known as Onsemi), which will provide components, including silicon carbide semiconductors, for its electric vehicles. Also in January, Phoenix-based Onsemi announced that it would supply silicon carbide chips to South Korean auto brands Kia and Hyundai.

Shares of Veeco rose 5.1% to close Wednesday at $20.87.

By Ken Schachter

kenneth.schachter@newsday.comkschach

Ken Schachter covers corporate news, including technology and aerospace, and other business topics for Newsday. He has also worked at The Miami Herald and The Jerusalem Post.