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DOC Acquiring Mobile Camera Module Assets in China
Mar 2012
SAN JOSE, Calif., March 5, 2012 — DigitalOptics Corp. (DOC) will acquire the China-based camera module manufacturing brand and assets of Flextronics International Ltd. of Singapore for $23 million in cash. DOC's parent company, Tessera Technologies Inc., announced the deal on March 2. The business is expected to have the capacity to manufacture about 50 million camera module units per year, and will help DOC become profitable by significantly increasing its imaging technologies sales, Tessera said.

"This transaction is a critical step in our strategy of transforming DOC from an optical and image enhancement software and components business into a Tier-One qualified, vertically integrated supplier of next-generation camera modules to the $9-billion market for mobile cameras," said Robert A. Young, Tessera president and CEO. "Our goal is for DOC to become profitable in 2013."

Sale of the camera module business, part of Vista Point Technologies, includes existing customer contracts and a lease to a 135,000-sq-ft facility in Zhuhai, China. DPC said it plans to keep "a portion" of the existing China workforce.

Flextronics said it will retain a portion of Vista Point Technologies assets, but will repurpose them and focus engineering staff toward strengthening its ability to deliver manufacturing services.

DOC President Bob Roohparvar said the acquisition is part of the company's strategy to make DOC a leading supplier of integrated camera modules for mobile phones by allowing it to "significantly increase" sales of the imaging technologies it has acquired and developed over the past five years.

One such technology is its MEMS (microelectromechanical system) autofocus product, which is seen as a replacement for today's magnetic voice coil technology by enabling cameras to be thinner and faster, and have more accurate lens positioning while battery usage is dramatically reduced. "We continue to have active discussions with multiple Tier-One OEM manufacturers of mobile phones" about the product, Young said, adding that the company is on track to "obtain a design win in the first half of 2012 and to begin high-volume manufacturing in the fourth quarter of 2012."

In addition to developing technologies to enhance optical imaging — including software that helps mobile phone cameras to correct hand motion or to improve the autofocus functions — DOC has been developing its capacity to oversee the high-volume manufacturing operations required by mobile phone makers. DOC's steps in the past year have included hiring more than a dozen executives and managers who have experience in engineering scale-up as well as in manufacturing at similar facilities, the company said.

"We believe our approach is the best way to address the requirements of Tier-One OEM manufacturers, which require that camera modules be delivered through dual sourcing from high-volume manufacturing facilities," Young said.

The transaction, subject to government approval and other closing conditions, is expected to close in the third quarter, and possibly sooner.

In a move that it said was related to the sale, Flextronics named Chris Cook as president of Power and Advanced Manufacturing Solutions. Cook has more than 20 years of experience in the semiconductor industry, most recently at Infineon Technologies.

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