Apple's Face ID component supplier Finisar acquired for $3.2B

Posted:
in AAPL Investors edited November 9
Finisar, the producer of laser scanners used to power Apple's Face ID system on its iPhones, has been acquired by optical system producer II-VI Incorporated, in a purchase said to be worth approximately $3.2 billion.

Machinery on a Finisar laser production line
Machinery on a Finisar laser production line


II-VI announced the purchase on Friday, with the acquisition consisting of a cash-and-stock deal at a 37.7 percent premium on Finisar's closing price from Thursday. Shareholders of Finisar will own around 31 percent of the combined company once it is completed, which is currently expected to close in mid-2019 following regulatory approval.

It is anticipated the purchase will generate approximately $2.5 billion in annual revenue and $150 million in cost savings within three years of the deal's close, the Financial Times reports.

Finisar is known to be a supplier to Apple for the VCSELs (vertical-cavity surface-emitting lasers) used in the TrueDepth camera in the iPhone X, iPhone XS, iPhone XS Max, and iPhone XR. The lasers are used to produce a depth map of the user's face, primarily for Face ID but also for other features like Portrait selfies and Animoji.

Apple provided $390 million to Finisar out of its billion-dollar Advanced Manufacturing Fund toward the end of 2017, to increase its production and R&D spending on the components. Finisar also acquired a 700,000 square foot facility in Sherman, Texas, which is directly linked to Apple's VCSEL demands.

II-VI is an optoelectronic component and optical systems producer, so there are considerable synergies between the two firms. In a statement, II-VI claimed the purchase will "unite two innovative, industry leaders with complementary capabilities and cultures to form a formidable industry-leading photonics and compound semiconductor company."

The acquisition may also help II-VI in other fields that use VCSELs, including self-driving vehicles, allowing cars to see the road and any nearby obstacles via a depth map. This is also a field Apple is involved with via "Project Titan," with the iPhone producer operating a fleet of autonomous vehicles in California to test out its self-driving systems.

Comments

  • Reply 1 of 15
    MacProMacPro Posts: 17,776member
    I am just glad it wasn't acquired by Google or Samsung!
    lostkiwiwatto_cobrarepressthis
  • Reply 2 of 15
    asciiascii Posts: 5,941member
    I would have thought any supplier to Apple would be raking it in and not in a position to be acquired.
    lostkiwiwatto_cobra
  • Reply 3 of 15
    sphericspheric Posts: 1,674member
    ascii said:
    I would have thought any supplier to Apple would be raking it in and not in a position to be acquired.
    They were. 

    3.2 billion dollars is rather a large amount of money. 
    watto_cobra
  • Reply 4 of 15
    d_2d_2 Posts: 49member
    MacPro said:
    I am just glad it wasn't acquired by Google or Samsung!
    Agreed... and IMO II-VI is a very cool company
    watto_cobra
  • Reply 5 of 15
    mjtomlinmjtomlin Posts: 1,791member
    MacPro said:
    I am just glad it wasn't acquired by Google or Samsung!

    I wouldn't be surprised if Apple didn't have some say in whether this deal went through or not.
    watto_cobra
  • Reply 6 of 15
    MacPro said:
    I am just glad it wasn't acquired by Google or Samsung!
    Which raises the question: For critical technologies like this, why doesn’t Apple acquire a controlling stake in these companies? Should a competitor get ahold of these companies, it puts Apple’s plans at risk.
    lostkiwiwatto_cobra
  • Reply 7 of 15
    MacProMacPro Posts: 17,776member
    mjtomlin said:
    MacPro said:
    I am just glad it wasn't acquired by Google or Samsung!

    I wouldn't be surprised if Apple didn't have some say in whether this deal went through or not.
    Hopefully!  Then again remember IBM forgot to have a clause stopping Gates selling his OS to IBM PC clones.  Lawyers have been known to make some really big mistakes although I doubt Apple's would.
    watto_cobra
  • Reply 8 of 15
    Rayz2016Rayz2016 Posts: 4,455member
    MacPro said:
    I am just glad it wasn't acquired by Google or Samsung!
    Which raises the question: For critical technologies like this, why doesn’t Apple acquire a controlling stake in these companies? Should a competitor get ahold of these companies, it puts Apple’s plans at risk.

    Any existing contracts will still have to be honoured, and since Apple seems to have poured a large amount of cash into the company, then I imagine production is quite safe for the foreseeable future. 

    Apple doesn't tend to buy large manufacturing outfits because when the tech becomes obsolete, you're sort of stuck with it.
    racerhomie3socalbrianlostkiwirepressthiswatto_cobrajony0
  • Reply 9 of 15
    wizard69wizard69 Posts: 12,641member
    MacPro said:
    I am just glad it wasn't acquired by Google or Samsung!
    These are still small companies.   In fact there are few truly large optical sciences companies but thousands of smaller ones.  
  • Reply 10 of 15
    wizard69wizard69 Posts: 12,641member
    Rayz2016 said:
    MacPro said:
    I am just glad it wasn't acquired by Google or Samsung!
    Which raises the question: For critical technologies like this, why doesn’t Apple acquire a controlling stake in these companies? Should a competitor get ahold of these companies, it puts Apple’s plans at risk.

    Any existing contracts will still have to be honoured, and since Apple seems to have poured a large amount of cash into the company, then I imagine production is quite safe for the foreseeable future. 

    Apple doesn't tend to buy large manufacturing outfits because when the tech becomes obsolete, you're sort of stuck with it.
    Apple can always sell off an obsolete division.   However I really don’t think this tech will go obsolete any time soon.    Laser tech isn’t going away, rather new uses are found everyday.   
  • Reply 11 of 15
    mjtomlinmjtomlin Posts: 1,791member
    MacPro said:
    mjtomlin said:
    MacPro said:
    I am just glad it wasn't acquired by Google or Samsung!

    I wouldn't be surprised if Apple didn't have some say in whether this deal went through or not.
    Hopefully!  Then again remember IBM forgot to have a clause stopping Gates selling his OS to IBM PC clones.  Lawyers have been known to make some really big mistakes although I doubt Apple's would.

    And add to that Apple porting and giving Microsoft the Macintosh Toolbox API's to create a GUI version of Office for DOS, which they then repurposed to create Windows 3.0
    watto_cobra
  • Reply 12 of 15
    Sort of a generic name for a semiconductor company. Just the names of the two columns of the periodic table that they make their heterogeneous semiconductor devices from. I assume that means they exclusively work with II-IV structures and not design any III-V structure devices.
    watto_cobra
  • Reply 13 of 15
    wizard69 said:
    MacPro said:
    I am just glad it wasn't acquired by Google or Samsung!
    These are still small companies.   In fact there are few truly large optical sciences companies but thousands of smaller ones.  
    What?  There are thousands of "optical sciences companies" (whatever that means) are worth billions of dollars?
    watto_cobra
  • Reply 14 of 15

    Sort of a generic name for a semiconductor company. Just the names of the two columns of the periodic table that they make their heterogeneous semiconductor devices from. I assume that means they exclusively work with II-IV structures and not design any III-V structure devices.
    Actually it's II-VI not II-IV.  How is it pronounced?  "2 6" I assume and not "eye eye vee eye"
    watto_cobra
  • Reply 15 of 15
    Laser impact on eyes via FaceID, and possible impact on vision, never, ever mentioned.   AI seems to take it on faith that lasers constantly scanning faces are perfectly safe.  How do we know?  Precautionary principle essentially ignored.   I guess it's a huge experiment, on millions of eyeballs.
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