Horsham-based chip equipment maker SSEC acquired by Veeco Instruments for $150 million

Tom Paine

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In one of the larger tech deals in the Phily area of 2014, New York State-based Veeco Instruments announced in early December it had acquired SSEC (Horsham) for $150 million in cash. Founded in 1965, SSEC (Solid State Equipment Holdings LLC) is part of the remaing legacy of the area's once considerable semiconducter-related industry.

SSEC says on its website that it "holds to the philosophy that the integrated circuit industry is still in its infancy." SSEC "designs and manufacturers single-wafer wet etch, clean and surface preparation equipment targeting high-growth segments in advanced packaging, micro-electro-mechanical systems (MEMS) and compound semiconductors," writes the trade publication Semiconductor Today. Veeco’s chairman & CEO John R. Peeler said "SSEC extends our compound semiconductor and MEMS footprint, and represents a stepping stone to the high-growth advanced packaging market.” MEMS is a hot area; MEMS appplications are largely being driven by consumer devices, but industrial IoT applications are expected to be major drivers in the future.

SSEC's  WaferEtch(TM) TSV Revealer

Based in Plainview, NY, Veeco (NASDAQ:VECO) had revenue of $332 million and a net loss of $42 million in 2013. Veeco has actually shrunk in recent years, partly as a result of a 2010 divestiture. It is now focused on higher-growth markets of supplying process equipment to the LED, solar, data storage and wireless industries.

Veeco is forecasting SSEC’s revenues to be $65 million in 2015, and it expects it to provide earnings before interest, taxes, depreciation, amortization, equity compensation, and other non-recurring items (adjusted EBITDA) of greater than 20% of sales in 2015.

SSEC was recognized on the 2013 Inc. 5000 with 2012 revenue of $80.4 million, up from $47.7 million in 2009. It would appear that its revenue has gone down since then, given Veeco's 2015 forecast, but such cycles are not unusual in the semiconductor industry.

Rich Richardson has been the longtime chairman of SSEC and Herman Itzkowitz the CEO. Summit Partners made the last reported investment in SSEC in 2011. SSEC has 44 employees listed on LinkedIn, most of them in the Philadelphia area.