Friday, December 19, 2008
Microsemi Target Of DOJ Lawsuit
Irvine-based Microsemi, a manufacturer of analog and mixed signal semiconductors, finds itself on the wrong side of a lawsuit filed this morning by the Department of Justice. According to the DOJ, it has filed a civil antitrust lawsuit against Microsemi over the firm's recent acquisition of Semicoa Inc.'s assets. Microsemi paid $25M in cash for Semicoa, a provider of semiconductors for the military and commercial market, in July. The DOJ said that as a result of the transaction, Microsemi eliminated or reduced competition in the development, manufacture, and sales of certain semiconductors used in military and space programs--essential to the security of the United States. The DOJ said that the move created a monopoly for small signal transistors that meet Department of Defense standards. The DOJ also said that prices for those products have increased, are likely to continue to increase, and that there is likely to be lower quality service from the firm. The lawsuit seeks to undo the transaction, by selling off the assets of Semicoa. The DOJ explained that the lawsuit was triggered when Microsemi raised prices significantly on small signal transistors, and threatened to impose on these customers less favorable terms of service than were provided before the acquisition.