SYDNEY, AUSTRALIA: Australian semiconductor developer BluGlass Limited (ASX: BLG) has reached agreement to acquire a commercial Silicon Valley laser diode production facility lease and manufacturing equipment (the Fab) for US$2.5 million.
The acquisition will fast-track BluGlass’ growth strategy, significantly increasing its laser diode manufacturing capacity and bringing forward higher-value product development timelines.
To fund the acquisition and ongoing operation of the production facility, BluGlass has secured A$3.4 million via a Placement to new and existing institutional and sophisticated investors. The Company is also undertaking a non-renounceable 1:4 Entitlement Offer to raise up to a further A$7.5 million to enable shareholders to participate on the same terms as the Placement.
Commenting on the strategic acquisition, BluGlass’ President Jim Haden said: “We plan to take advantage of a unique opportunity, to acquire a full-suite commercial laser diode fab for a fraction of the circa US$40 million it would cost us to build today. The acquisition aligns and accelerates our longer-term growth plans, bringing core fabrication processes in-house to eliminate supply chain variability and improve the quality and consistency of our laser diodes. Importantly, it provides us with greater control over development roadmaps, enabling us to launch higher-value products sooner.
“In addition to more than quadrupling development, manufacturing turns and wafer capacity, our own fab enables us to halve production costs and has the potential to bring forward positive cashflows to 2024/2025. It triples our revenue generation capacity, and allows us to execute on our strategic vision of becoming the industry’s easiest-to-use laser light by offering the most flexible and agile product development and manufacturing. As one of just four end-to-end gallium nitride laser diode manufacturers globally, we have a significant opportunity to build share within a fast-growing market expected to reach US$2.5 billion by 2025.
“The acquisition will fast track our transition from a cutting-edge R&D company to a commercial provider of industry-leading GaN laser diodes. Over the past year, we have attracted industry experts to our management and Board, advanced our product development of multiple laser products and are delivering against a clear commercialization and growth strategy. A Silicon Valley-based fab increases our access to highly skilled semiconductor and GaN talent even further.
“We’re encouraged by the strong ongoing support of our existing investors, and welcome new institutional funds to the register at a pivotal period for the Company. BluGlass is focused on the commercialisation of our first direct-to-market laser diodes. We remain confident about our future. We have the right team and strategy in place and are now in the process of securing the final piece of the puzzle, a manufacturing fab to further expand our product offering and scale our operations.”
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