The Southern Appalachian Fund (SAF) is one of six New Market Venture Capital Companies (NMVCCs) in the United States.
OAK RIDGE, Tenn. & STARKVILLE, Miss.--(BUSINESS WIRE)--Power Integrations (Nasdaq: POWI), the leader in high-voltage integrated circuits for energy-efficient conversion, announced on October 22, 2010, a $30 million strategic investment in SemiSouth Laboratories, Inc. (SemiSouth), a Mississippi-based manufacturer of high-voltage, silicon-carbide (SiC) semiconductor devices. The Southern Appalachian Fund (SAF) initially invested in SemiSouth in 2005 as part of the company’s first institutional equity round, and SAF made multiple follow on investments in SemiSouth between 2006 and early 2010. Grady Vanderhoofven of SAF has served as an observer or member of the SemiSouth Board of Directors since 2005.
“SemiSouth has made impressive breakthroughs in the development of silicon-carbide technology, attaining exceptionally high levels of efficiency and establishing SiC as an enabler of clean technologies such as solar energy and hybrid/electric vehicles”
“SemiSouth has made impressive breakthroughs in the development of silicon-carbide technology, attaining exceptionally high levels of efficiency and establishing SiC as an enabler of clean technologies such as solar energy and hybrid/electric vehicles,” stated Balu Balakrishnan, president and CEO of Power Integrations. “With a mutual focus on energy-efficient high-voltage semiconductor technology, Power Integrations and SemiSouth are natural strategic partners. While we were surprised to find a venture-backed semiconductor company in the southern Appalachia region, we’ve since discovered that the area offers an environment highly conducive to innovation and private-sector investment, thanks to strong support from government, the academic community and regional investors. We are impressed by what SemiSouth has accomplished with financial support from the Southern Appalachian Fund and other early investors.”
SemiSouth is noteworthy for reasons in addition to its technology and product development accomplishments. The company is located in Starkville, MS, home of Mississippi State University (MSU), in an area that is both rural and low-income. The company was started by two MSU professors and spun-out into an incubator facility on the Thad Cochran Research, Technology, and Economic Development Park campus, near MSU. Since the company’s founding and prior to the Power Integrations investment, SemiSouth had raised more than $20 million of equity financing and secured more than $30 million of federal grants and contracts. This capital allowed the company to fund facility improvements and capital equipment purchases and create dozens of high-quality, technology jobs in rural, low-income Mississippi. SemiSouth ultimately grew to fill the entire incubator, which became the company’s world headquarters and home to its multi-million dollar, state-of-the-art research, development, and production facilities. SemiSouth has since opened additional offices in Texas, Europe, Japan, and Korea. The incubator, originally named the Powe Research Center, was built to house technology-based companies associated with MSU, using grant funds from several organizations, including the Tennessee Valley Authority (TVA) and the Appalachian Regional Commission (ARC).
Dr. Jeffrey B. Casady, co-founder and CTO of SemiSouth, stated, “Energy efficiency and energy security are important in the global economy today, and we have developed technology that positively impacts these two areas significantly. To reach this point, we have faced the challenges of starting and growing the business in a non-traditional area. We were the first semiconductor company with a manufacturing clean room in Mississippi, and to accomplish that goal we needed to appeal to investors who could share our vision of improving the global power semiconductor market and simultaneously creating high-tech economic development in southern Appalachia. Without our early investors, including the Southern Appalachian Fund, Delta Capital, and several individual business leaders, and without an initial strategic investment from II-VI, Inc., we wouldn’t have gotten off the ground. Those early investors enabled us to make enough progress to attract additional capital from the region, as well as global investors like Schneider Electric Ventures of France, and most recently from Power Integrations, who is a strong partner for us moving forward.”
“SemiSouth is changing the way energy is processed through breakthrough SiC semiconductor technology,” said Grady Vanderhoofven of the Southern Appalachian Fund. “SemiSouth has attracted an exceptional management team, as well as substantial national and international attention from customers and investors. The strategic relationship with industry-leading Power Integrations is a landmark validation of what SemiSouth has accomplished to date and the promises of the future. These accomplishments are even more impressive when you consider the company is located in rural, low income, southern Appalachia. The results to date exemplify what is possible when you combine exceptional entrepreneurs, an aggressive and accommodating university, supportive federal and regional agencies, and access to venture capital in an underserved market.”
About the Southern Appalachian Fund
The Southern Appalachian Fund (SAF) is one of six New Market Venture Capital Companies (NMVCCs) in the United States. SAF is a $12.5 million venture capital fund formed to generate attractive returns for the fund’s investors while creating wealth and jobs in low-income areas of Tennessee, Kentucky, and the Appalachian counties of Georgia, Alabama, and Mississippi. In addition to providing investment capital, the fund provides operational assistance to its portfolio companies. The fund is not seeking new investment opportunities, but SAF has invested in eight companies in low income areas throughout southern Appalachia. For more information on the Southern Appalachian Fund, please visit www.southappfund.com.
About the New Market Venture Capital Program
The New Markets Venture Capital (NMVC) Program is a developmental venture capital program designed to promote economic development and the creation of wealth and job opportunities in low-income geographic areas and among individuals living in such areas. In 2002 and 2003, the Small Business Administration (SBA) entered into agreements with six New Markets Venture Capital Companies (NMVCCs). Each NMVCC was formed as a for-profit venture capital fund, using a combination of private capital and federally guaranteed debentures, with private management. NMVCCs make equity and equity-type investments in smaller enterprises located in low income areas and provide operational assistance through grants that are supportive of such enterprises. For more information on the New Market Venture Capital Program, please visit www.sba.gov/aboutsba/sbaprograms/inv/nmvc/INV_NMVC_PROGOVERVIEW.html.
About Power Integrations
Power Integrations is the leading supplier of high-voltage integrated circuits used in energy-efficient power conversion. The company’s innovative technology enables compact, energy-efficient power supplies in a wide range of electronic products, in AC-DC, DC-DC and LED lighting applications. Since its introduction in 1998, Power Integrations’ EcoSmart energy-efficiency technology has saved an estimated $4.4 billion of standby energy waste and prevented millions of tons of CO2 emissions. The company’s Green Room web site provides a wealth of information about “energy vampires” and the issue of standby energy waste, along with a comprehensive guide to energy-efficiency standards around the world. Reflecting the environmental benefits of EcoSmart technology, Power Integrations is included in clean-technology stock indices sponsored by the Cleantech Group (Amex: CTIUS) and Clean Edge (Nasdaq: CELS). For more information, please visit www.powerint.com.
About SemiSouth Laboratories
SemiSouth, a privately owned corporation with offices in Starkville, Mississippi, focuses on SiC power devices and electronics. It was formed in 2000 and has sold products globally through direct sales or distributors since 2005. It introduced the world’s first commercial, cost-effective normally-off SiC JFET in 2008, enabling world-record energy (over 99%) efficiency for its customers’ products in solar inverters. SemiSouth has been recognized as a leader in energy-efficient and/or harsh-environment solutions for customers in solar, industrial power supplies, wind, electric vehicles, military-aerospace, and other key markets. More information can be obtained from its website, www.semisouth.com.
