Bandwidth Semiconductor, LLC (Bandwidth), a wholly-owned subsidiary of Spire Corporation (Nasdaq: SPIR) has entered into a five-year manufacturing agreement in which it will be the exclusive supplier to Principia Lightworks, Inc. (Principia), of semiconductor wafers.
This agreement will enable Principia, a Woodland Hills, California firm, to begin high volume production of its patented device, an electron beam pumped vertical cavity surface emitting laser (eVCSEL) as a light source for projection display applications, including rear-projection consumer television (RPTV).
Under the terms of this agreement, Bandwidth will be producing III/V and II/VI wafers for Principia with full production expected to start in mid 2007. During the first three years of the agreement, Bandwidth anticipates revenues will be in excess of $16 million, which includes revenue from the production of wafers and recognition of certain nonrecurring engineering and facility access payments.
Bandwidth will begin the scale-up of its existing metal organic chemical vapor deposition (MOCVD) and related processing facilities to satisfy Principia’s requirements. Principia has made an up-front payment for nonrecurring engineering and facility access costs and, in addition will make monthly facility availability payments throughout the term of the agreement.
Although the Company will be committing capital resources to complete the scale-up, it anticipates the up-front payment plus the monthly payments will be sufficient to meet its capital requirements under the agreement, and providing the parties meet their respective obligations over the term of the Agreement, no net outlay of capital will be needed.
Principia Lightworks, Inc., is a developer of cutting-edge laser television technologies. Mr. Don Klein, Executive VP/Business Development for Principia, said, “After evaluating a number of potential suppliers we chose Bandwidth because of their broad range of MOCVD and compound semiconductor device experience. Once in production, Principia will offer the projection display market the first truly high powered, low cost, red, green, and blue laser light source. The agreement with Bandwidth will allow us to meet the high volume demand from RPTV manufacturers.”
Mr. Edward D. Gagnon, General Manager of Bandwidth Semiconductor, LLC, said, “This is a big opportunity for us. We have invested heavily in bringing Bandwidth to this level of expertise needed to satisfy Principia’s requirements. Our scale-up will meet Principia’s production demands, as well as allow us to continue to satisfy our growing customer base.”
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