Harris Semiconductors has revealed that fears of overdependence on government markets underpinned its decision to purchase General Electric’s Solid State Electronics division for $206m in August, 1988 (CI No 994). Harris Semiconductors’s purchase of the $550m a year unit now gives it annual sales of $850m a year, making the Melbourne, Florida concern the sixth largest semiconductor supplier in the US, and the largest supplier to the US government; the deal included the RCA Solid State, GE Semiconductor and Intersil semiconductor operations, which will all be retained as brand names. Harris’s purchase of GE’s Solid State – described by head of marketing Mike Graff as only modestly profitable – was an attempt to give the organisation a balance that more closely reflected the semiconductor market as a whole. Harris was worried at its dependence on government markets: 58.7% of its sales were to government, a figure that will drop to 33% when the acquisition is finally completed in December. The company’s share of commercial sales will rise to 14.6% from 5.4%, consumer sales to 17.6% from 1.5% and industrial sales to 21.2% from 17%. Harris, attracted to GE’s ASIC, CMOS and smart-power integrated circuit technologies, was also concerned at its technological balance; its share of CMOS logic products will consequently rise to 33% from 25%, while analogue will fall to 37% from 53%, closer to the wordwide level of 20% of all semiconductor sales. The purchase of GE also fitted in with the company’s fear of becoming too vertically integrated, while Harris management is also keen to stress the similarities of the two firms’ niche marketing strategies, including GE’s automotive specific products for applications such as ignition-control systems and instrumentation.
