LONDON —Chip equipment vendor KLA-Tencor is set to acquire Israel-based Orbotech for $3.4 billion in a move that the firm says will help diversify its revenue base and add $2.5 billion of addressable market opportunity in high-growth printed circuit boards, flat panel displays, packaging and semiconductor manufacturing.

KLA-Tencor (Milpitas, Calif.) says the broader portfolio of products and services as well as increased exposure to technology megatrends will support its long-term revenue and earnings growth targets.

Rick Wallace
Rick Wallace

"This combination will open new market opportunities for KLA-Tencor, and expands our portfolio serving the semiconductor industry," said Rick Wallace, KLA-Tencor's president and CEO, in a statement. "Our companies fit together exceptionally well in terms of people, processes, and technology."

Wallace added that KLA-Tencor has had a strong presence in Israel over the years and said this deal would further expand its operations "in this important global technology region."

Incorporated in 1981, Orbotech recently announced that SPTS Technologies, a supplier of advanced wafer processing solutions for semiconductor and related industries that it acquired in 2014, had received $37 million in orders for multiple etch and deposition systems from two GaAs foundry customers. The company’s Omega plasma etch, Delta PECVD and Sigma PVD systems are to be used to manufacture RF devices, including power amplifiers, for 4G and emerging 5G wireless infrastructure and mobile device markets.

The Delta PECVD systems from Orbotech's SPTS Technologies is being used by GaAs foundries for producing RF devices, including power amplifiesr for 4G and 5G. Source: Orbotech
The Delta PECVD systems from Orbotech’s SPTS Technologies is being used by GaAs foundries for producing RF devices, including power amplifiesr for 4G and 5G.
Source: Orbotech

Orbotech also announced last month that LG Display had ordered multiple Quantum automated optical inspection tools for its new flexible OLED Gen 6 fab in Paju, South Korea, which is intended for flexible mobile device display production.

Following acquisition by KLA-Tencor, Orbotech will continue to operate under the Orbotech brand as a standalone business of KLA-Tencor based in Yavne, Israel.

— Nitin Dahad is a European correspondent for EE Times.