Business as usual as Harris sells its semiconductor sector

MELBOURNE, Fla. —Officials say they plan no immediate substantial changes at the Harris Corp. Semiconductor Sector in Melbourne, Fla., after the company changes ownership to Sterling Holding Co. LLC, a subsidiary of Citicorp Venture Capital Ltd. in New York.

Jul 1st, 1999

By John Keller

MELBOURNE, Fla. —Officials say they plan no immediate substantial changes at the Harris Corp. Semiconductor Sector in Melbourne, Fla., after the company changes ownership to Sterling Holding Co. LLC, a subsidiary of Citicorp Venture Capital Ltd. in New York.

Harris Corp. leaders announced the sale of their semiconductor business June 2. Their reason: they want to focus exclusively on the worldwide communications equipment market, and semiconductors do not fit into their strategy, according to a Harris statement.

Meanwhile, Harris Semiconductor customers have nothing to worry about, say officials of the new, yet-unnamed, company. "At worst it will be business as usual, and hopefully much better," says Steve Strickler, manager, military and space marketing in the Harris Semiconductor military & space products group.

"There will be no changes in any of our new product schedules — and we are even trying to accelerate them," Strickler says. "We will be even more flexible than we were before because we are a little smaller, and we don`t have Harris corporate hanging over our heads anymore. We are really going great guns, and this should be seamless to customers."

Sterling Holding is the same group that bought Fairchild Semiconductor Corp. in South Portland, Me., from National Semiconductor Corp., says Brent Dietz, a Harris Semiconductor spokesman. The new company should have a new name and company logo by July, he says.

The sale of Harris Semiconductor does not involve the Harris suppression business or photomask operations, which Harris Corp. leaders say they will sell separately, a company statement says.

Harris corporate officials announced their intention last April to sell their power electronics business, Strickler explains. In the course of selling the power group, company leaders decided the best course was to sell the entire semiconductor unit, he says.

"This is the greatest thing that could have happened," Strickler says. "Harris didn`t sell power separately, so we still have synergy between our space and defense activities, and the space and defense power group."

Harris Semiconductor specializes in analog and mixed-signal integrated circuits for power control, telecommunications subscriber line interfaces, and wireless local area networks. Its defense and space group focuses on providing these kinds of devices with built-in radiation hardening, Dietz explains.

"The real focus for our space and defense business is going to be in rad-hard power management," Dietz says. "We have introduced our first two parts, and over the course of next year we will introduce a whole family of parts for distributed power on satellites. We are going after very specific end markets in which we have a real competitive advantage."

Harris is selling the semiconductor sector for about $700 million cash, notes, retained receivables, and contingency payments, in addition to the equity in the business. Harris will retain 10 percent ownership in the business.

Harris Semiconductor had sales of $530 million over the past year.

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