ABB has agreed to acquire the semiconductor business of Polovodice a.s. in the Czech Republic. ABB states that the additional production capacity for high-power semiconductors will help it to cope with the expected rising demand fueled by growth in renewable energy and efforts to improve energy efficiency.

Polovodice a.s.has been making power semiconductors since the mid-1950s and had revenues in the low double-digit millions of US dollars, mostly from its power semiconductor activities. Together with the semiconductor assets, about 200 employees with strong technical capabilities will join ABB. The parties agreed not to disclose the value of the transaction, which is subject to customary regulatory approvals.

Power semiconductors are switching devices that control the flow of electrical power and convert electricity into the wave form and frequency needed. They are at the heart of many leading ABB technologies such as high-voltage direct current (HVDC) transmission systems, variable speed drives and to connect renewable energy sources such as wind and solar to the electricity grid.

"Power semiconductors are central to the development of smarter electricity networks in which greater use of renewable energy is combined with better control of power flows for more reliability and efficiency," said Peter Leupp, head of ABB’s Power Systems division. "The business of Polovodice a.s.will strengthen our market position as one of the leading producers of power semiconductors."

ABB is already investing $150 million over three years to expand its semiconductor plant in Lenzburg, Switzerland. The acquisition will improve economies of scale at each facility and will increase flexibility of production and delivery.