Cork Business is Sold for €64m
Blackrock-based Powervation has been acquired for â¬64m by by Japanese electronics giant ROHM Semiconductor meaning Cork is one step closer to becoming a global hi-tech hub.
CORK is one step closer to becoming a global hub for digital micro-chips after the recent acquisition of Blackrock-based Powervation by Japanese electronics giant ROHM Semiconductor.
Powervation, a University of Limerick spin-out whose headquarters are on the Bessboro Road in Blackrock, was acquired by the Kyoto-based global leader in semiconductor sales in a â¬64 million deal on July 23. It is a remarkable result for what began life as a PhD project and currently employs less than 40 people worldwide, with 20 of these working in Cork.
At the Cork headquarters of Powervation today following the announcement that it has been acquired by Japanese company ROHM Semiconductor for US$70million were: Michael McAuliffe, CEO, Powervation and Jun Lida, Director ROHM Semiconductor. Also included are from left, Hiroshi Ikeda, Senior Business Planner ROHM Semiconductor, Eamonn OÕMalley, co-founder Powervation, Fearghal OÕRiordain, investor with SEP, Mike Smith, SVP & GM ROHM Semiconductor and Takahiro Ota, Director ROHM Semiconductor.
At the Cork headquarters of Powervation following the announcement that it has been acquired by Japanese company ROHM Semiconductor for US$70million were: Michael McAuliffe, CEO, Powervation and Jun Lida, Director ROHM Semiconductor. Also included are from left, Hiroshi Ikeda, Senior Business Planner ROHM Semiconductor, Eamonn Oâ Malley, co-founder Powervation, Fearghal OâRiordain, investor with SEP, Mike Smith, SVP & GM ROHM Semiconductor and Takahiro Ota, Director ROHM Semiconductor.
The firmâs micro-chips essentially manage power in electronics. Powervationâs focus is on improving efficiency and reducing cost and emissions. They have been used by Google and Amazon, among others.
ROHM spotted the innovation in Powervationâs work and saw it as essential to filling a gap in their own production, according to Powervationâs Vice President for Finance Frank Cassidy.
Mr Cassidy, who commutes to Blackrock each day from Ennis, said that Powervationâs digital semiconductors set it apart from most in the industry, with analogue still the norm.
âROHM operates at a very technical level. The difference is that they make analogue semi-conductors, while we make digital. They want to get into the digital space and fill that gap in their product line. So, they had two options. They could either hire engineers and spend years developing a product line, or they could buy an existing one. They werenât after our customers or our profits, but our product.â
ROHM have speculated that the addition of Powervationâs expertise will allow the development of industry-leading technology. The Japanese giant already clears $3bn per year in sales revenue, with even greater growth expected as a result of the move.
Jun Lida, a member of the ROHM board of directors, said: âThe combination of our two companies will enable ROHM to develop industry-leading, integrated digital power solutions to serve a broad range of customers, markets, and applications spanning the entire spectrum from Computing and Communications to Consumer and Industrial.â
Following the announcement of the merger, Powervation CEO Mike McAuliffe described the move as a âgreat fitâ. Mr McAuliffe, who is originally from Midleton and is a UCC graduate, operates out of Powervationâs office in San Jose, California.
He said: âThe Powervation team is excited to join forces with ROHM, a top 25 global leader semiconductor company. It is simply a great fit â we have built an innovative Digital Power IC company to date, but the combination with ROHM now presents a compelling opportunity for broad market leadership in Digital Power Management solutions.â
Both Mr McAuliffe and Mr Cassidy have indicated that operations in Cork are likely to increase after ROHM have conducted analysis of the purchase. The terms of the deal mean that Powervation will become a fully-owned subsidiary of ROHM, with its principal design centre remaining in Cork and system application centres in the US and Asia.
While specifics have yet to be discussed, Mr Cassidy said that the likelihood is that Cork will become ROHMâs centre of excellence and that they will look to invest further in developing operations in the city once initial assessments have been conducted.
âROHM want to invest in Cork. They will evaluate the needs in Cork. They want to understand the technology better and see what resources are here and what is needed. We are confident that they will continue to operate in Cork and that there will be a bright future for all of the guys here.â
Mr Cassidy credited the importance of relocating to Cork as essential in determining the companyâs success. Initially based in Limerick, the start-up struggled to compete with tech giants Intel in attracting talent. However, since moving to Cork in 2008, operations have grown steadily.
Currently, the companyâs Cork headquarters operates with seven nationalities, including Serbian, Romanian, Spanish, Italian and American. Additional facilities operate in Shanghai, San Jose and Taiwan.
Mr Cassidy said that the companyâs international workplace is indicative of both the lack of qualified electronic engineers in Ireland, and the attractiveness of Cork for overseas workers.
âYou wonât find an unemployed electronic engineer in Ireland! There was a move away from the industry in the last few years here and there are fewer graduates and, in particular, people with the required experience. But we have been lucky and we are benefiting from a melting pot of experience, which keeps us from getting stale. They like the size and location of Cork as a workplace and with Japanese influence adding to the rest, we should see something very exciting.â
High-skilled jobs key to Cork becoming âsilicon valleyâ
CORKâSâ status as a start-up and technology hub has been critical in Powervationâs success â but more work is needed to help the city fulfill its potential, according to the companyâs VP for Finance, Frank Cassidy.
Mr Cassidy said that operating out of Cork has allowed Powervation to grow, attracting high-calibre international talent and allowing it to sell itself to its overseas investors. However, he said that there is a danger that too few highly skilled jobs are based in the city and county and that these are key to becoming Western Europeâs Silicon Valley. âOf course it is great to see the various job announcements coming for the city recently, but a lot of these are in customer service. If Ireland really wants to be the Silicon Valley of Western Europe, as it says, it needs more high-calibre, high-value jobs.â Central to this, he said, is the emergence of more start-ups in technical, highly skilled industries. Support systems are needed to ensure that more of these are successful and, Mr Cassidy hopes, Powervation may prove to be such an example for those just starting out. âI hope Powervation can be used as an example for entrepreneurs; that it shows it can be done. The acquisition by ROHM will hopefully encourage others to try to start something new.â
Mr Cassidy said that Corkâs tradition in digital power was recognised by ROHM during the investment process. Powervation included a picture of UCCâs first ever professor of mathematics George Boole, the so-called father of the information age, which prompted an excited reaction from the Japanese delegation. âThey recognised him, even though some of them could barely speak English. It really showed Cork as the home of digital power.â Close links to Tyndall and UCC have been cited by Powervation as important in its growth, too, with the development centre one of the first ports of call for the visiting Japanese consortium last week.Â Mr Cassidy said, âIt was a slow process to sell Powervation to ROHM. They were very honourable, very inquisitive and, ultimately, it is a very positive story. Relationships such as those with Tyndall were very important in developing the company and the product and, ultimately, in securing the deal.â Relationships such as these, he said, are essential to allow Powervation, ROHM and others to continue to innovate and reinvent their product base.