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US sues to break up military and space kit acquisition

Price of diodes are a bitch these days

The smart choice: opportunity from uncertainty

The US Department of Justice wants to bust an alleged monopoly by Microsemi, a California-based firm that sells high-reliability electronic kit to the government for military applications, satellites, and spacecraft.

On Thursday, the DoJ filed a civil antitrust lawsuit against the company in the Eastern District of Virginia, seeking to terminate its July acquisition of its rival Semicoa for $25m. The department also asks to preserve Semicoa as an independent manufacturer leading up to the trial.

The lawsuit claims Microsemi's acquisition eliminates or reduces competition in the development, manufacturer, and sale of certain semiconductor devices designed to meet US Department of Defense standards.

"While consolidation within the defense industry in certain circumstances may be beneficial, in this case, the Departments of Justice and Defense are united in the view that Microsemi's acquisition of the Semicoa assets is not likely to result in savings to DOD but would result in higher costs, lower quality of service, and increased supply vulnerability," the department stated.

The complaint alleges that a post-acquisition Microsemi significantly raised its prices on parts such as small signal transistors used in space and military applications. It adds Microsemi has also threatened to impose less favorable terms of service than were provided before the acquisition.

Microsemi responded to the charges today with a 627-word press statement that includes the company's 2007 and 2008 revenues, a lengthy company description, and a safe harbor statement. Hidden somewhere in there is an actually relevant sentence: "Microsemi intends to aggressively defend its position."

Not exactly helpful. Microsemi could learn a lesson about playing to the audience from the DoJ:

"Because failure of even a single one of these components could result in the failure of a vital, multibillion dollar mission – and potentially cost the lives of American servicemen and women and astronauts – components with lesser degrees of reliability cannot be substituted for the products at issue in this case," the lawsuit states.

The monopoly could kill America's heroes!? Curse you, overly-expensive ultrafast recovery diodes! If only your extremely high alternating speed to minimize power loss and waste heat generation wasn't so tempting! ®

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