The negotiations on the sale of Yokne'am-based ColorChip to a Chinese company for $300 million have reached an unhappy end: the negotiations have broken down, and the company will be forced to lay off half its workforce. It currently employs about 200 people, and letters summoning employees selected for dismissal to pre-dismissal hearings were sent out yesterday. ColorChip declined to provide further details or comment. A source close to the company said that claims that it would cease operations were groundless and that it was continuing with business as usual and was supporting existing customers and working on development of new products. The source said the current measures were a streamlining process following the situation that had arisen, and that it was part of the cyclicity that was characteristic of the industry that currently made layoffs of workers necessary.
In August this year, ColorChip was on the point of completing negotiations on a lucrative exit with Chinese company Sanan Optoelectronics, which is traded on the Shanghai stock exchange at a market cap of $13 billion. Sources said however that the publicity given to the deal wrecked the negotiations and caused the Chinese company to withdraw. No confirmation has been obtainable from ColorChip itself or from Sanan.
ColorChip has developed high bandwidth electro-optic components for data transmission in the datacenters of large enterprises. Its main investors are Eli Barkat's BRM, Moshe Lichtman, and Haim Shani's IGP (Israel Growth Partners), Gemini Israel Ventures, Viola Credit, and Vintage Investment Partners. Over the years, the company has raised $97 million. It raised $37 million In April 2017. ColorChip was founded in 2001 by Eli Arad, who serves as VP Research and Development, Shimon Eckhaus, and Prof. Shlomo Ruschin. The company's CEO is Yigal Ezra.
Published by Globes, Israel business news - en.globes.co.il - on December 24, 2018
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