Johnson Matthey, Cray Cut Deal Spokane-Based Company Buys Cray’s Printed Circuit Board Operations
Johnson Matthey Electronics will acquire the printed circuit board manufacturing operations of Cray Research Inc. for about $40 million, the two companies announced Tuesday.
The acquisition is the latest step in the dramatic growth of Johnson Matthey Electronics as the Spokane company pursues its strategy of becoming No. 1 in world market share with a variety of materials and component products for the intensely competitive semiconductor industry.
The acquisition of the Cray operation, according to Johnson Matthey Finance Director Don Miller, positions the company to take advantage of a change in the packaging of integrated circuits.
“There’s a shift in the semiconductor industry just starting to take place,” Miller said Tuesday. “The current package that houses the integrated circuitry is ceramic. We believe there is a shift away from ceramics to plastic laminate packages.
“We feel we are in the forefront of that technology, and the Cray acquisition is going to provide capacity for us to apply our expertise.”
Johnson Matthey Electronics is fast becoming the major sales-producing division of Johnson Matthey Plc, a 175-year old London-based precious metals company with operations in 28 countries and annual sales of more than $3 billion.
The division was only a tiny part of Johnson Matthey Plc’s vast scope when it came to Spokane through the acquisition of Cominco Ltd.’s manufacturing facility here in 1989. The electronics division produced less than one percent of the parent company’s operating profits five years ago.
With projected 1996 sales of $610 million, Johnson Matthey Electronics will produce about one-third its parent’s operating profits.
A part of that phenomenal growth has been fueled by acquisition. The company produces components and materials for the semiconductor industry, and has been trying to broaden its penetration worldwide.
Last fall, Johnson Matthey Electronics acquired Advance Circuits Inc. Based in Minnesota, ACI specializes in high-tech printed circuit boards and plastic laminate packaging. Miller said the Cray acquisition is a direct follow-up of the ACI deal.
Cray is the world’s leading manufacturer of high-performance computers. Its printed circuit board manufacturing operation is one of the most advanced in the United States, according to a Johnson Matthey news release, with the capability to produce some of the most sophisticated circuitry in the world.
Located in Chippewa Falls, Wis., the facility has a work force of 350 operating state-of-the-art equipment.
The news release said Johnson Matthey will use the facility to continue to supply high-tech printed circuit boards to Cray, “giving Johnson Matthey an immediate revenue stream as it ramps up production to meet the requirements of its key customers for plastic laminate packaging.”
The sale is part of Cray’s efforts to streamline its operations. The Egan, Minn.-based company lost $226.3 million on sales of $676.2 million last year after earning $55.7 million on sales of $921.6 million in 1994.
The acquisition will boost employment in Johnson Matthey Electronics to about 3,500 at 20 facilities worldwide. The company employs about 575 people at its facilities in the Spokane Valley.