-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, mwz56faovzS453Wvobrs0S2gLdkmNXYrj5+8wCshVouElK8zVpsoeTqTPy/0QeKj njvGEx/K5U4lQj628jxoTg== 0000912057-95-004632.txt : 19950616 0000912057-95-004632.hdr.sgml : 19950616 ACCESSION NUMBER: 0000912057-95-004632 CONFORMED SUBMISSION TYPE: S-3/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 19950615 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: VLSI TECHNOLOGY INC CENTRAL INDEX KEY: 0000704386 STANDARD INDUSTRIAL CLASSIFICATION: SEMICONDUCTORS & RELATED DEVICES [3674] IRS NUMBER: 942597282 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3/A SEC ACT: 1933 Act SEC FILE NUMBER: 033-60049 FILM NUMBER: 95547337 BUSINESS ADDRESS: STREET 1: 1109 MCKAY DRIVE STREET 2: M-STOP 19 CITY: SAN JOSE STATE: CA ZIP: 95131 BUSINESS PHONE: 4084343000 MAIL ADDRESS: STREET 1: 1109 MCKAY DRIVE CITY: SAN JOSE STATE: CA ZIP: 95131 S-3/A 1 S-3A AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 15, 1995 REGISTRATION NO. 33-60049 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------------- AMENDMENT NO. 1 TO FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------- VLSI TECHNOLOGY, INC. (Exact name of registrant as specified in its charter) DELAWARE 1109 MCKAY DRIVE 94-2597282 (State or other jurisdiction of SAN JOSE, CALIFORNIA 95131 (I.R.S. Employer incorporation or organization) Telephone: (408) 434-3100 Identification No.)
(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) ALFRED J. STEIN CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE OFFICER VLSI TECHNOLOGY, INC. 1109 MCKAY DRIVE SAN JOSE, CA 95131 TELEPHONE (408) 434-3100 (Name, address, including zip code, and telephone number, including area code, of agent for service) --------------------- COPIES TO: LARRY W. SONSINI, Esq. CHRISTOPHER L. KAUFMAN, Esq. ANN YVONNE WALKER, Esq. ORA FRUEHAUF, Esq. Wilson, Sonsini, Goodrich & Rosati Latham & Watkins Professional Corporation 505 Montgomery Street, Suite 1900 650 Page Mill Road San Francisco, California 94111 Palo Alto, California 94304-1050 (415) 391-0600 (415) 493-9300
--------------------- APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after the effective date of this Registration Statement. --------------------- If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. / / If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. / / --------------------- If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering._/ /_________ If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering._/ /_________ If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box._/ / CALCULATION OF REGISTRATION FEE
PROPOSED PROPOSED MAXIMUM MAXIMUM AMOUNT OFFERING AGGREGATE AMOUNT OF TITLE OF EACH CLASS OF SECURITIES TO BE PRICE OFFERING REGISTRATION TO BE REGISTERED REGISTERED (1) PER UNIT (2) PRICE (2) FEE (3) Common Stock, $0.01 par value............... 3,450,000 $27.1875 $93,796,875 $32,344
(1) Includes 450,000 shares that the Underwriters have the option to purchase to cover over-allotments, if any. Also includes Preferred Share Purchase Rights associated with the Common Stock. (2) Estimated solely for the purpose of computing the amount of the registration fee, based on the average of the high and low prices for the Common Stock as reported on the Nasdaq Stock Market on June 9, 1995, in accordance with Rule 457(c) promulgated under the Securities Act of 1933. (3) $24,661 of the registration fee was paid on June 7, 1995 upon filing the Registration Statement on Form S-3 to which this Amendment No. 1 relates. --------------------- The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Information contained herein is subject to completion or amendment. A registration statement relating to these securities has been filed with the Securities and Exchange Commission. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This prospectus shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any State in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such State. SUBJECT TO COMPLETION JUNE 15, 1995 PROSPECTUS 3,000,000 SHARES [LOGO] COMMON STOCK ($.01 PAR VALUE) All of the 3,000,000 shares of Common Stock, $0.01 par value (the "Common Stock"), offered hereby (the "Offering") are being offered by VLSI Technology, Inc. ("VLSI" or the "Company") for sale through the several Underwriters named herein. The Common Stock of the Company is quoted on the Nasdaq Stock Market under the symbol "VLSI." The last reported sale price of the Company's Common Stock on the Nasdaq Stock Market on June 14, 1995 was $27.875 per share. See "Price Range of Common Stock and Dividend Policy." SEE "RISK FACTORS" COMMENCING AT PAGE 5 FOR CERTAIN FACTORS RELEVANT TO AN INVESTMENT IN THE COMMON STOCK OFFERED HEREBY. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. - --------------------------------------------------------------------------------
PRICE TO UNDERWRITING PROCEEDS TO PUBLIC DISCOUNT COMPANY (1) Per Share................................................. $ $ $ Total (2)................................................. $ $ $ - -------------------------------------------------------------------------------- (1) Before deducting expenses paid or payable by the Company estimated to be $325,000. (2) The Company has granted to the Underwriters a 30-day option to purchase up to 450,000 additional shares of Common Stock solely to cover over-allotments, if any. If the Underwriters exercise such option in full, the total Price to Public, Underwriting Discount and Proceeds to Company will be $ , $ , and $ , respectively. See "Underwriting."
The shares of Common Stock are offered subject to receipt and acceptance by the Underwriters and to the Underwriters' right to reject any order in whole or in part and to withdraw, cancel or modify the offer without notice. It is expected that delivery of the certificates for the shares of Common Stock will be made at the office of Salomon Brothers Inc, Seven World Trade Center, New York, New York, or through the facilities of The Depository Trust Company on or about , 1995. SALOMON BROTHERS INC BEAR, STEARNS & CO. INC. HAMBRECHT & QUIST MONTGOMERY SECURITIES THE DATE OF THIS PROSPECTUS IS , 1995. AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files reports, proxy and information statements and other information with the Securities and Exchange Commission (the "Commission"). Such reports, proxy and information statements and other information may be inspected and copied at the public reference facilities maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the Commission's Regional Offices located at Seven World Trade Center, 13th Floor, New York, New York 10048 and at Northwest Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material also can be obtained from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The Company has filed a registration statement on Form S-3 (herein, together with all amendments and exhibits, referred to as the "Registration Statement") with the Commission under the Securities Act of 1933, as amended (the "Securities Act"). This Prospectus does not contain all of the information set forth in the Registration Statement, certain parts of which are omitted in accordance with the rules and regulations of the Commission. For further information, reference is hereby made to the Registration Statement. INFORMATION INCORPORATED BY REFERENCE The following documents filed by VLSI with the Commission (File No. 0-11879) pursuant to the Exchange Act are incorporated herein by reference: 1. The Company's Annual Report on Form 10-K for the fiscal year ended December 30, 1994. 2. The Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1995. 3. The description of the Company's Common Stock contained in its Registration Statement on Form 8-A filed with the Commission on April 20, 1984, as amended, and the description of the Company's Preferred Share Purchase Rights issued and issuable pursuant to its stockholder rights plan, contained in the Registration Statement on Form 8-A filed with the Commission on November 20, 1989, as amended. In addition, all reports and other documents subsequently filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to the termination of the offering of Common Stock shall be deemed to be incorporated by reference in this Prospectus from the date of filing such documents. Any statement contained in a document incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any subsequently filed document that also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. The Company will provide without charge to each person, including any beneficial owner, to whom this Prospectus is delivered, upon the written or oral request of such person, a copy of any and all of the documents that are incorporated herein by reference (other than exhibits to such documents, unless such exhibits are specifically incorporated by reference into such documents). Requests for such documents should be directed to Gregory K. Hinckley, Vice President, Finance, and Chief Financial Officer at the principal executive offices of VLSI Technology, Inc., 1109 McKay Drive, San Jose, California 95131 or by telephone at (408) 434-3100. --------------------- IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. IN CONNECTION WITH THIS OFFERING, CERTAIN UNDERWRITERS AND SELLING GROUP MEMBERS MAY ENGAGE IN PASSIVE MARKET MAKING TRANSACTIONS IN THE COMMON STOCK ON NASDAQ IN ACCORDANCE WITH RULE 10B-6A UNDER THE SECURITIES EXCHANGE ACT OF 1934. SEE "UNDERWRITING." --------------------- The VLSI name and logo, Polar-TM- and FSB are trademarks of the Company. This Prospectus also includes trademarks of companies other than VLSI. The following companies are mentioned in this Prospectus: Alcatel Alsthom Compagnie Generale d'Electricite ("Alcatel"), AT&T Corp. ("AT&T"), Apple Computer, Inc. ("Apple"), Cadence Design Systems, Inc. ("Cadence"), Chips and Technologies, Inc. ("Chips and Technologies"), Cisco Systems, Inc. ("Cisco"), Compaq Computer Corporation ("Compaq"), DSC Communications Corporation ("DSC"), Digital Equipment Corporation ("DEC"), Telefonaktiebolaget LM Ericsson ("Ericsson"), Hewlett-Packard Company ("Hewlett-Packard"), Hitachi, Ltd. ("Hitachi"), Hughes Corporation ("Hughes"), Intel Corporation ("Intel"), International Business Machines Corporation ("IBM"), LSI Logic Corporation ("LSI"), Matsushita Electric Industrial Co., Ltd. ("Matsushita"), Mentor Graphics Corporation ("Mentor Graphics"), Motorola, Inc. ("Motorola"), National Semiconductor Corporation ("National Semiconductor"), NEC Corporation ("NEC"), Newbridge Networks Corporation ("Newbridge"), NexGen, Inc. ("NexGen"), Oak Technology, Inc. ("Oak Technology"), Packard Bell Electronics, Inc. ("Packard Bell"), Pioneer Electronic Corporation ("Pioneer"), Rockwell International Corporation ("Rockwell"), Sagem SA ("Sagem"), Silicon Graphics, Inc. ("Silicon Graphics"), Sony Corporation ("Sony"), Tellabs, Inc. ("Tellabs"), Texas Instruments Incorporated ("Texas Instruments" or "TI"), Thomson Consumer Electronic ("Thomson"), Toshiba Corporation ("Toshiba") and UB Networks, Inc. ("UB Networks"). 2 PROSPECTUS SUMMARY THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED INFORMATION AND CONSOLIDATED FINANCIAL STATEMENTS APPEARING ELSEWHERE IN, OR INCORPORATED BY REFERENCE INTO, THIS PROSPECTUS. THE COMPANY VLSI is a leader in the design, manufacture and sale of highly complex application specific integrated circuits ("ASICs") -- custom designed chips for an individual customer -- and application specific standard products ("ASSPs") - -- semi-custom chips designed for a particular market application that may be used by several different customers. The Company targets high-volume markets in which it has built significant expertise and can use its library of proprietary cells and highly integrated building blocks to assist customers in designing products and bringing them to market rapidly. VLSI's target markets include the computing, communications and consumer and entertainment markets. VLSI emphasizes high performance applications where its products are critical elements of complex electronic systems. VLSI targets key OEM customers who are leaders in their respective industries. The Company's major customers include Compaq, Apple, Ericsson, Hewlett-Packard, Tellabs, Alcatel and Silicon Graphics. VLSI produces a significant portion of its wafers (approximately 73% in 1994) at its own facilities and augments internal manufacturing capacity with the foundry services of third-party wafer subcontractors. The Company believes that this strategy improves quality, cost-effectiveness, responsiveness to customers, access to capacity, ability to implement leading edge process technology and time to market, as compared to semiconductor companies that lack fabrication facilities. The semiconductor industry is, however, currently facing capacity constraints in wafer manufacturing and the availability of third-party wafer foundries has diminished significantly. Due to this manufacturing capacity shortage, as well as increased customer demand, the Company is seeking to accelerate the expansion and upgrading of its internal and external manufacturing capacity. Through its subsidiary, COMPASS Design Automation, Inc. ("COMPASS"), VLSI offers an integrated suite of electronic design automation ("EDA") software tools, foundry-flexible libraries and support services for use by systems and circuit designers at other semiconductor and systems companies, as well as at the Company, in creating complex integrated circuits. The Company's principal executive offices are located at 1109 McKay Drive, San Jose, California 95131, and the Company's telephone number is (408) 434-3100. THE OFFERING Common Stock offered by the Company.......... 3,000,000 shares (1) Common Stock to be outstanding after the Offering................................... 39,871,246 shares (1)(2) Nasdaq Stock Market Symbol................... VLSI Use of Proceeds.............................. To add wafer fabrication capacity - ------------------------ (1) Assumes that the Underwriters' over-allotment option is not exercised. See "Underwriting." (2) Based on 36,871,246 shares outstanding as of March 31, 1995. Does not include shares reserved for issuance. See footnote 1 to the table under the heading "Capitalization."
3 SUMMARY CONSOLIDATED FINANCIAL DATA (in thousands, except per share data)
FISCAL YEAR (1) QUARTER ENDED (2) ------------------------------------------------ ---------------------------------- 1990 (3) 1991 1992 (4) 1993 (5) 1994 APRIL 1, 1994 MARCH 31, 1995 -------- -------- -------- -------- -------- ----------------- -------------- CONSOLIDATED STATEMENT OF OPERATIONS DATA: Net revenues.......................... $324,828 $413,376 $428,498 $515,946 $587,091 $138,123 $163,035 Operating income (loss)............... (6,062) 23,173 (19,282) 27,082 46,749 8,348 15,631 Net income (loss)..................... (12,740) 9,873 (32,217) 15,883 31,697 5,361 10,250 Fully diluted net income (loss) per share................................ $ (0.52) $ 0.37 $ (1.12) $ 0.45 $ 0.85 $ 0.15 $ 0.26 Weighted average common and common equivalent shares outstanding........ 24,339 26,657 28,865 35,276 37,446 36,802 41,798
MARCH 31, 1995 ----------------------------- ACTUAL AS ADJUSTED (6) --------- ------------------ CONSOLIDATED BALANCE SHEET DATA: Working capital.................................................................. $ 137,914 $ 217,242 Total assets..................................................................... 504,537 583,865 Short-term debt, including current portion of long-term obligations.............. 13,946 13,946 Long-term debt and noncurrent capital lease obligations.......................... 94,108 94,108 Stockholders' equity............................................................. 267,266 346,594 - ------------------------------ (1) From 1990 through 1993, VLSI's fiscal year end was the last Saturday of December. In 1994, the Company changed its fiscal year end to the last Friday of December. The actual dates of the Company's fiscal year ends in the table above are December 29, 1990, December 28, 1991, December 26, 1992, December 25, 1993 and December 30, 1994. The fiscal year ended December 30, 1994 was a 53-week year. The current fiscal year is a 52-week year ending on December 29, 1995. (2) The quarter ended April 1, 1994 was a 14-week quarter. The quarter ended March 31, 1995 was a 13-week quarter. (3) Includes a special charge of $12.8 million reflecting the estimated cost of corporate reorganization related to exiting the memory business. (4) Includes a special charge of $22.5 million related to the de-emphasis of older technologies, costs of streamlining sales distribution channels, costs of relocating certain offices, writedowns of nonperforming assets and costs associated with intellectual property matters. (5) Includes a special charge of $1.0 million representing a write-off of purchased in-process research and development expenses related to the acquisition of certain assets. (6) Assumes that the Underwriters' over-allotment option is not exercised. See "Underwriting." Adjusted to reflect the sale of the 3,000,000 shares of Common Stock offered hereby at an assumed price of $27.875 per share. The estimated net proceeds have been added to working capital pending their use. See "Use of Proceeds."
4 RISK FACTORS IN ADDITION TO THE OTHER INFORMATION PROVIDED IN THIS PROSPECTUS AND IN THE DOCUMENTS INCORPORATED BY REFERENCE HEREIN, THE FOLLOWING FACTORS SHOULD BE CAREFULLY CONSIDERED IN EVALUATING THE COMPANY AND ITS BUSINESS BEFORE PURCHASING THE COMMON STOCK OFFERED BY THIS PROSPECTUS. FLUCTUATIONS IN OPERATING RESULTS. The Company believes that its future operating results will be subject to quarterly variations based upon a wide variety of factors, including the cyclical nature of both the semiconductor industry and the markets addressed by the Company's products, price erosion, competitive factors, fluctuations in manufacturing yields, the timing of new product introductions, changes in product mix, the availability and extent of utilization of manufacturing capacity, product obsolescence, scheduling, rescheduling and cancellation of large orders, the ability to develop and implement new technologies, changes in effective tax rates and litigation expenses. The Company's COMPASS subsidiary, like other companies in the EDA business, is particularly subject to significant fluctuations in revenues due to limited backlog and its reliance on large orders placed late in the quarter. The Company increases its level of operating expenses and investment in manufacturing capacity in anticipation of future growth in revenues. To the extent this revenue growth does not materialize, the Company's operating results would be adversely affected. In circumstances where the Company is operating at less than full capacity or has targeted a market segment as a long-term strategic focus, the Company may choose, in the face of severe pricing pressure, to manufacture products at low or no profitability. The Company's second quarter financial results will be adversely affected by a $19.4 million charge to earnings relating to a May 1995 verdict against VLSI in a patent infringement lawsuit. See "-- TI Litigation; Intellectual Property Matters" and "Recent Developments -- TI Litigation." MANUFACTURING CAPACITY LIMITATIONS. The Company's manufacturing facilities are operating at capacity. As a result, VLSI's growth is constrained and the Company has experienced difficulty in meeting some delivery dates requested by customers. Prolonged inability of VLSI to deliver products in a timely manner could result in the loss of customers and materially adversely affect results of operations. In addition, the Company is experiencing manufacturing inefficiencies associated with the operation of its facilities at capacity while simultaneously working to expand or upgrade that capacity. Significant lead time is required to acquire and install additional wafer fabrication equipment. To the extent that the Company is unable to procure and install such equipment in a timely manner, the increase in wafer production capacity at its facilities would be delayed. In addition, available third-party wafer fabrication, assembly, testing and packaging capacity has become very limited in recent months. The Company relied on two outside suppliers for approximately 27% of its 1994 wafer production. Although the Company has ongoing relationships with these suppliers, the Company has only one contract for guaranteed capacity. The other supplier has notified the Company that it will sequentially reduce its allocation of wafers to VLSI from the third quarter of 1995 through the second quarter of 1996 and has indicated that it does not intend to supply wafers to the Company thereafter. There can be no assurance that such supplier will not further reduce its allocation to VLSI. The Company will be required to find alternative sources of wafer supply to replace the capacity previously provided by such supplier. If the Company is unable to replace such wafer supplier, its sales of products would be diminished, which could have a material adverse impact on the Company's operations. In addition, the Company relies on three suppliers for almost all assembly operations and a significant portion of test operations and any reduction in allocation from these suppliers would adversely affect the Company's operations. MANUFACTURING RISKS. The fabrication of integrated circuits is an extremely complex and precise process consisting of hundreds of separate steps and requiring production in a highly controlled, clean environment. Minute impurities, errors in any step of the fabrication process, defects in the masks used to print circuits on a wafer or other factors can cause a substantial percentage of wafers to be rejected or numerous die on each wafer to be nonfunctional. The Company may experience problems in achieving acceptable yields in the manufacture of wafers, particularly in connection with any expansion of its capacity or change in its processing steps. For example, in late 1992, the Company switched processes 5 at one step in the manufacturing line, which caused certain VLSI chips to fail. The Company's replacement of these chips at no charge to the customers adversely affected results of operations in the first quarter of 1993. In addition to manufacturing in its own facilities, VLSI has wafer manufacturing arrangements with two integrated circuit manufacturing companies. These wafer subcontractors are themselves subject to all of the manufacturing risks that are applicable to VLSI's own wafer manufacturing operations. The Company also subcontracts virtually all of its integrated circuit packaging and a significant portion of its final testing to third parties, principally ANAM Industrial Company in Korea, ASE Corporation in Taiwan, Advanced Semiconductor Assembly Technology in Hong Kong and Mitsui Incorporated in Japan. In addition, the Company's foreign subcontract manufacturing arrangements are subject to risks such as changes in government policies, transportation delays, increased tariffs, fluctuations in foreign exchange rates, and export and tax controls. Any problems experienced in obtaining acceptable wafers from third party wafer subcontractors on a timely basis to augment the Company's internal manufacturing capacity or in the integrated circuit packaging, assembly and test operations performed by subcontractors could delay shipments of the Company's products and materially adversely affect the Company's results of operations. The Company's success is also dependent upon its ability to develop and implement new manufacturing process technologies. Semiconductor design and process methodologies are subject to rapid technological change, requiring large expenditures for research and development. Most of the Company's products are currently manufactured using sub-micron CMOS processes. The Company believes that the transition to smaller geometry process technologies will be important to remaining competitive. The Company is in the process of expanding and upgrading its manufacturing facility in San Jose, California to convert production to a 6-inch CMOS wafer process. The Company's San Antonio facility, which is currently using both 0.6-micron and 0.8-micron processes, is being converted to 100% 0.5-micron CMOS process capability. These conversion activities could result in a disruption to the facilities' manufacturing cycles, thereby lowering the output of the facilities as well as wafer yields. Any lack of success of the Company's facilities conversion efforts would have a material adverse effect on future operating results and, in particular, delay of planned increased production of 6-inch CMOS wafers at the San Jose facility, currently scheduled for the third quarter of 1995, could adversely affect near-term results. The Company is party to a joint development agreement with Hitachi, which expires in 1997. Under such agreement, the Company and Hitachi work together to develop advanced sub-micron processes for the manufacture of integrated circuits. In addition, the Company is dependent on Hitachi for assistance in developing other state-of-the-art manufacturing processes. Any failure or disruption of the Company's joint development activities could have a material adverse effect upon the Company's ability to implement state-of-the-art manufacturing processes. The Company's San Jose facility, which accounted for approximately 42% of its total internal production in the first quarter of 1995, is located near major earthquake faults and in an area that has in the recent past experienced an extended drought. Even though the Company utilizes both of its fabrication plants and two subcontractors to manufacture its wafers and has the ability to shift manufacturing from one plant to another for many of its products, disruption of operations at either of the Company's production facilities or at those of its subcontractors for any reason, such as fire or earthquake, would cause delays in shipments until the Company could shift the products from the affected facility or subcontractor to another facility. FUTURE CAPITAL NEEDS. Semiconductor companies such as VLSI have substantial ongoing capital requirements to obtain internal or external manufacturing capacity. In order to remain competitive, the Company must continue to make significant investments in capital equipment and expansion of facilities, as well as in research and development. Development and implementation of sub-micron manufacturing processes is particularly capital intensive, requiring significant investments in new state-of-the-art equipment. The Company currently anticipates that its capital expenditures for 1995 will be approximately $200 million. The Company believes that the net proceeds from the sale of the Common Stock in 6 this offering, together with existing cash balances, cash flow from operations, available equipment financing and proceeds from the expected exercise by Intel of its warrant for an aggregate exercise price of approximately $31.3 million, will be sufficient to meet the Company's liquidity and capital requirements through 1996. However, the Company is currently exploring methods of increasing both its internal and external manufacturing capacity. As a result, the Company may be required or choose to seek additional equity or debt financing to fund further expansion of its internal or external wafer fabrication capacity or for other purposes. The timing and amount of such capital requirements cannot be precisely determined and will depend on a number of factors, including demand for the Company's products, product mix, changes in semiconductor industry conditions and competitive factors. There can be no assurance that such additional financing will be available when needed or, if available, will be on satisfactory terms. The failure to obtain financing would hinder the Company's ability to make continued investments in capital equipment and facilities, which could materially adversely affect the Company's results of operations. DEPENDENCE ON PERSONAL COMPUTER INDUSTRY. The Company estimates that total sales to the personal computer market during 1994 represented approximately 47% of the Company's net revenues. With five of the Company's top ten customers in 1994 operating in the personal computer industry, a deterioration of business conditions in the personal computer industry would have a material adverse effect on VLSI's operations. The personal computer market is volatile and is subject to significant shifts in demand and severe pricing pressures. In addition, the market for the Company's personal computer devices is characterized by rapid technological change and product obsolescence. The Company's results in the PC market will also be dependent in part on the Company's ability to respond quickly to new microprocessor architectures adopted by major OEMs. The Company's need to anticipate customer product transitions also leads to potential inventory exposure, which could adversely affect the Company's financial results. CYCLICAL NATURE OF THE SEMICONDUCTOR INDUSTRY. The semiconductor industry has historically been characterized by wide fluctuations in product supply and demand. From time to time, the industry has also experienced significant downturns, often in connection with, or in anticipation of, declines in general economic conditions. These downturns, which in some cases have lasted for more than a year, have been characterized by diminished product demand, production over-capacity and subsequent accelerated erosion of average sales prices. The Company, like other semiconductor manufacturers with fabrication facilities, has high fixed costs for its manufacturing facilities and believes that its operating results were adversely affected by an industry-wide downturn in the demand for semiconductors in 1990. This downturn coincided with the recession in the U.S. economy and slower growth in various electronics industries using semiconductors, including market segments in which the Company was engaged at the time. NEW PRODUCT RISKS. The Company's future success depends on its ability to continue to develop and introduce new products that compete effectively on the basis of price and performance and that satisfy customer requirements. New product development often requires long-term forecasting of market trends, development and implementation of new processes and technologies and substantial capital commitments. If the Company is unable to design, develop, manufacture and market new products successfully and in a timely manner, its operating results will be materially adversely affected. No assurance can be given that the Company's product and process development efforts will be successful or that new products will achieve market acceptance. For example, the Company expended considerable financial and technical resources during 1993 and part of 1994 toward the development of its Polar product, a device intended for the handheld computer market integrating Intel's 386SL microprocessor. Because the handheld market developed more slowly than initial expectations, the Company and Intel, its partner in the Polar development effort, canceled the Polar project and terminated the amended July 8, 1992 Technology Agreement between the companies. COMPETITION. The semiconductor industry in general and the markets in which the Company competes in particular are intensely competitive, exhibiting both rapid technological change and ongoing price erosion as technologies mature. The Company competes with large domestic and foreign companies that 7 have substantially greater financial, technical, marketing and management resources than the Company, such as AT&T, IBM, Intel, LSI, Motorola, TI and Toshiba. Competition is particularly intense in X86 core logic chip sets where Intel, a dominant supplier of microprocessors to the PC industry, has become the major supplier of Pentium PC chip sets, as well as motherboards, which is likely to cause increased pricing and margin pressure on such chip sets. Competition faced by COMPASS in the EDA market comes primarily from a few large established vendors, such as Cadence and Mentor Graphics. There is no assurance that the Company will be able to compete successfully in the future. CONCENTRATION OF CUSTOMER BASE. Approximately two-thirds of the Company's net revenues for 1994 were derived from sales to its top 20 customers, a large percentage of which are in the personal computer business. As a result of the concentration of the Company's customer base, loss or cancellation of business from any of these major customers, significant changes in scheduled deliveries to any of these customers or decreases in the prices of products sold to any of these customers could materially adversely affect the Company's results of operations. These risks of customer concentration are exacerbated by the fact that the Company's agreements with its customers for the purchase of products are generally terminable by such customers at any time and permit customers to cancel orders previously placed for the Company's products without penalty. For example, in the fourth quarter of 1993, Apple, which accounted for 19% of 1993 net revenues, postponed and, in certain cases, canceled, approximately $20 million of shipments originally planned for delivery in 1994, adversely affecting VLSI's 1994 results of operations. Shipments to another customer, Compaq, accounted for 22% of net revenues in 1994 and 11% of net revenues in the first quarter of 1995. TI LITIGATION; INTELLECTUAL PROPERTY MATTERS. The Company is one of three defendants in a major patent infringement suit brought by Texas Instruments with respect to patents that have now expired, which suit resulted in a May 1995 jury verdict against VLSI for damages of $19.4 million. The Company intends to contest the verdict. However, the Company will record a charge to earnings of $19.4 million in the second quarter of 1995. Based on the jury's finding that the alleged infringement was intentional, TI may also request that the judge award treble damages. In the event that treble damages are awarded, the judgment could result in a material reduction in liquidity, as well as an increased impact on the Company's reported results of operations. See "Recent Developments - -- TI Litigation." The semiconductor industry is generally characterized by vigorous protection and pursuit of intellectual property rights and positions, which have on occasion resulted in protracted litigation that utilizes cash and management resources, which can have a significant adverse effect on operating results. There can be no assurance that additional intellectual property claims will not be made against the Company in the future or that the Company will not be prohibited from using the technologies subject to such claims or be required to obtain licenses and make corresponding royalty payments for past or future use. There can be no assurance that any such licenses could be obtained on commercially reasonable terms. AVAILABILITY OF RAW MATERIALS. Raw materials essential to the Company's business are generally available from multiple sources. However, due to increased levels of demand, there may be an industrywide shortage of raw silicon wafers. A prolonged inability to obtain silicon wafers or any other raw materials could have a material adverse impact on the Company's business. ENVIRONMENTAL REGULATIONS. The Company is subject to a variety of federal, state and local governmental regulations related to the storage, use, discharge and disposal of toxic, volatile or otherwise hazardous chemicals used in its manufacturing process. Increasing public attention has been focused on the environmental impact of semiconductor manufacturing operations. The Company's San Jose, California facilities are located near residential areas, which could increase the incidence of environmental complaints or investigations. There can be no assurance that changes in environmental regulations will not impose the need for additional capital equipment or other requirements. Any failure by the Company to control the use of, or adequately to restrict the discharge of, hazardous substances under present or future regulations could subject VLSI to substantial liability or could cause its manufacturing operations to be suspended. Such liability or suspension of manufacturing operations could have a material adverse effect on the Company's operating results. 8 VOLATILITY OF STOCK PRICE. The Company's Common Stock has experienced and can be expected to experience substantial price volatility. In addition, the stock market in general has experienced extreme price and volume fluctuations, which have particularly affected the market price of many technology companies and which have often been unrelated to the operating performance of those companies. See "Price Range of Common Stock and Dividend Policy." EFFECT OF POTENTIAL STOCK SALES. Intel has the right to demand registration of 2,677,604 shares of Common Stock issuable upon exercise of a fully exercisable warrant. Such rights may be exercised by Intel at any time, subject to the Company's ability to delay registration for 90 days if Intel makes the demand during an offering by the Company or the Company initiates an offering within 30 days of Intel's demand. There can be no assurance that Intel will not elect to exercise its demand right during or shortly after this offering, which election could adversely affect the market price of the Company's Common Stock. In addition, as of March 31, 1995, approximately 3,742,984 vested and unvested shares of the Company's Common Stock (the "Option Shares") were subject to employee and director stock options having exercise prices below the market price of the Common Stock shown on the cover page of this Prospectus. Many optionees may choose to exercise their options and sell the Common Stock acquired upon exercise in the coming months due to the significant spread between the exercise prices and current market prices. Shares of the Company's Common Stock are currently trading in excess of the conversion price of the Company's outstanding convertible subordinated debentures. This could lead to conversion of such debentures into shares of VLSI Common Stock, either voluntary or in response to a call for redemption by the Company. Sales of large numbers of shares by Intel, optionees, holders of convertible debentures who convert into Common Stock or others may have a depressing effect on the market price for the Company's Common Stock. See "Capitalization." 9 USE OF PROCEEDS The net proceeds to the Company from the sale of Common Stock offered hereby are estimated to be approximately $79,327,813 ($91,275,734 if the Underwriters' over-allotment option is exercised in full). The proceeds will be used primarily for adding internal or external wafer fabrication capacity. In particular, the Company intends to install additional manufacturing equipment and build out the third of four modules in its San Antonio fabrication facility to increase manufacturing capacity. Although the Company does not currently intend to use the proceeds of this offering for the acquisition of the business, products or technologies of other companies, it may in the future enter into agreements for such acquisitions. There are no pending agreements or arrangements concerning material acquisitions. Pending such uses, the net proceeds will be invested in investment grade securities. PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY The Company's Common Stock has been traded on the over-the-counter market under the Nasdaq Stock Market symbol VLSI since the Company's initial public offering in 1983. The following table sets forth, for the periods indicated, the high and low closing prices for the Common Stock on the Nasdaq Stock Market. The last reported sale price for the Common Stock of the Company on June 14, 1995 as reported by the Nasdaq Stock Market is set forth on the cover page of this Prospectus. At March 31, 1995, the Company had approximately 1,695 holders of record of its Common Stock and 36,871,246 shares outstanding. See also "Risk Factors--Volatility of Stock Price" and "--Effect of Potential Stock Sales."
HIGH LOW ----- ----- 1992: First Quarter................................................................. $10 $ 7 1/2 Second Quarter................................................................ 9 1/8 6 7/8 Third Quarter................................................................. 8 1/2 6 1/8 Fourth Quarter................................................................ 8 7 1993: First Quarter................................................................. $ 8 7/8 $ 6 3/4 Second Quarter................................................................ 8 7/8 6 1/2 Third Quarter................................................................. 18 5/8 9 1/2 Fourth Quarter................................................................ 18 5/8 9 3/4 1994: First Quarter................................................................. $16 $ 9 5/8 Second Quarter................................................................ 15 3/8 12 1/8 Third Quarter................................................................. 15 15/16 11 Fourth Quarter................................................................ 13 1/8 10 1/2 1995: First Quarter................................................................. 18 3/16 11 11/16 Second Quarter (through June 14, 1995)........................................ 29 5/8 16 3/4
The Company has never paid cash dividends on its Common Stock. The Company presently intends to retain all cash for use in the operation and expansion of the Company's business and does not anticipate paying any cash dividends in the near future. Certain of VLSI's debt agreements prohibit the payment of dividends without the lender's consent. 10 CAPITALIZATION The following table sets forth the capitalization and short-term debt of the Company at March 31, 1995, and as adjusted to give effect to the receipt of the estimated net proceeds from the sale of the 3,000,000 shares of Common Stock offered hereby at an assumed offering price of $27.875 per share.
MARCH 31, 1995 ------------------------- ACTUAL AS ADJUSTED ----------- ------------ (IN THOUSANDS) Short-term debt: Current portion of long-term debt.................................................... $ 7,703 $ 7,703 Current capital lease obligations.................................................... 6,243 6,243 ----------- ------------ Total short-term debt.............................................................. $ 13,946 $ 13,946 ----------- ------------ ----------- ------------ Long-term debt: 7% Convertible Subordinated Debentures due May 1, 2012............................... $ 57,500 $ 57,500 Other long-term debt................................................................. 32,374 32,374 Noncurrent capital lease obligations................................................. 4,234 4,234 ----------- ------------ Total long-term debt............................................................... 94,108 94,108 ----------- ------------ Stockholders' equity: Preferred Shares, $.01 par value, Authorized: 2,000,000 shares; no shares issued and outstanding......................................................................... -- -- Common Stock, $.01 par value, Authorized: 99,000,000 shares; Issued and outstanding: 36,871,246 shares; 39,871,246 shares, as adjusted(1)................................ 369 399 Junior Common Stock, $.01 par value, Authorized: 1,000,000 shares; no shares issued and outstanding..................................................................... -- -- Additional paid-in capital........................................................... 233,486 312,784 Retained earnings.................................................................... 33,411 33,411 ----------- ------------ Total stockholders' equity......................................................... 267,266 346,594 ----------- ------------ Total capitalization............................................................. $ 361,374 $ 440,702 ----------- ------------ ----------- ------------ - ------------------------ (1) Excludes (i) 1,740,691 shares of Common Stock subject to outstanding options under the Company's 1982 Incentive Stock Option Plan, which plan has expired as to future grants, (ii) 4,393,371 shares of Common Stock reserved for issuance upon exercise of stock options under the Company's 1992 Stock Plan, of which 1,877,293 shares are subject to outstanding options and 2,516,078 shares are available for future grant as of March 31, 1995, (iii) 523,838 shares of Common Stock reserved for issuance under the Company's employee stock purchase plan, (iv) 285,000 shares of Common Stock reserved for issuance upon exercise of stock options under the Company's 1986 Directors' Stock Option Plan, of which 125,000 shares are subject to outstanding options and 160,000 shares are available for future grant, (v) 2,613,636 shares reserved for issuance upon conversion of the Company's 7% Convertible Subordinated Debentures due May 1, 2012, and (vi) 2,677,604 shares of Common Stock reserved for issuance under a warrant granted to Intel.
11 SELECTED CONSOLIDATED FINANCIAL DATA The consolidated statement of operations data set forth below for the years ended December 26, 1992, December 25, 1993 and December 30, 1994 and the consolidated balance sheet data at December 25, 1993 and December 30, 1994 are derived from the financial statements of the Company, audited by Ernst & Young LLP, independent auditors, that are incorporated herein by reference, and are qualified by reference to such financial statements. The consolidated statement of operations data for the years ended December 29, 1990, and December 28, 1991, and the consolidated balance sheet data at December 29, 1990, December 28, 1991 and December 26, 1992 are derived from financial statements of the Company that also have been audited by Ernst & Young LLP but are not incorporated herein by reference. The financial data at March 31, 1995 and for the three-month periods ended April 1, 1994 and March 31, 1995 are derived from unaudited financial statements, which include all adjustments, consisting only of normal recurring accruals, that the Company considers necessary for a fair presentation of the consolidated financial position and the consolidated results of operations for these periods. Operating results for the three months ended March 31, 1995 are not necessarily indicative of the results that may be expected for future periods or for the year ending December 29, 1995. The data should be read in conjunction with the consolidated financial statements, related notes and other financial information included herein or incorporated herein by reference.
FISCAL YEAR (1)(2) QUARTER ENDED (3) -------------------------------------------------------- ----------------------------------- 1990 1991 1992 1993 1994 APRIL 1, 1994 MARCH 31, 1995 -------- -------- -------- -------- -------- ---------------- -------------- (IN THOUSANDS, EXCEPT PER SHARE DATA) CONSOLIDATED STATEMENT OF OPERATIONS DATA: Net revenues.............. $324,828 $413,376 $428,498 $515,946 $587,091 $138,123 $163,035 Cost of sales............. 215,757 275,414 293,392 327,774 356,858 86,940 98,961 -------- -------- -------- -------- -------- ---------------- -------------- Gross profit............ 109,071 137,962 135,106 188,172 230,233 51,183 64,074 Operating expenses: Research and development............ 35,521 39,167 50,442 65,431 78,889 18,705 20,668 Marketing, general and administrative......... 66,862 75,622 81,446 94,651 104,595 24,130 27,775 Special charge.......... 12,750(4) -- 22,500(5) 1,008(6) -- -- -- -------- -------- -------- -------- -------- ---------------- -------------- Operating income (loss)... (6,062) 23,173 (19,282) 27,082 46,749 8,348 15,631 Interest income and other expenses (net)........... 2,395 (1,161) (3,282) 1,512 3,301 802 881 Interest expense.......... (9,073) (9,234) (9,053) (8,063) (8,343) (2,004) (1,862) -------- -------- -------- -------- -------- ---------------- -------------- Income (loss) before provision for taxes on income................... (12,740) 12,778 (31,617) 20,531 41,707 7,146 14,650 Provision for taxes on income................... -- 2,905 600 4,648 10,010 1,785 4,400 -------- -------- -------- -------- -------- ---------------- -------------- Net income (loss)......... $(12,740) $ 9,873 $(32,217) $ 15,883 $ 31,697 $ 5,361 $ 10,250 -------- -------- -------- -------- -------- ---------------- -------------- -------- -------- -------- -------- -------- ---------------- -------------- Fully diluted net income (loss) per share......... $ (0.52) $ 0.37 $ (1.12) $ 0.45 $ 0.85 $ 0.15 $ 0.26 -------- -------- -------- -------- -------- ---------------- -------------- -------- -------- -------- -------- -------- ---------------- -------------- Weighted average common and common equivalent shares outstanding....... 24,339 26,657 28,865 35,276 37,446 36,802 41,798 FISCAL YEAR (1)(2) QUARTER ENDED (3) -------------------------------------------------------- ----------------------------------- 1990 1991 1992 1993 1994 APRIL 1, 1994 MARCH 31, 1995 -------- -------- -------- -------- -------- ---------------- -------------- Net revenues.............. 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Cost of sales............. 66.4 66.6 68.5 63.5 60.8 62.9 60.7 -------- -------- -------- -------- -------- ---------------- -------------- Gross profit............ 33.6 33.4 31.5 36.5 39.2 37.1 39.3 Operating expenses: Research and development............ 10.9 9.5 11.8 12.7 13.4 13.6 12.7 Marketing, general and administrative......... 20.7 18.3 19.0 18.3 17.8 17.5 17.0 Special charge.......... 3.9(4) -- 5.2(5) 0.2(6) -- -- -- -------- -------- -------- -------- -------- ---------------- -------------- Operating income (loss)... (1.9) 5.6 (4.5) 5.3 8.0 6.0 9.6 Interest expense and other, net............... 2.0 2.5 2.9 1.3 0.9 0.8 0.6 Provision for taxes on income................... -- 0.7 0.1 0.9 1.7 1.3 2.7 -------- -------- -------- -------- -------- ---------------- -------------- Net income (loss)......... (3.9)% 2.4% (7.5)% 3.1% 5.4% 3.9% 6.3% -------- -------- -------- -------- -------- ---------------- -------------- -------- -------- -------- -------- -------- ---------------- --------------
AT FISCAL YEAR END (1) ------------------------------------------------ AT 1990 1991 1992 1993 1994 MARCH 31, 1995 -------- -------- -------- -------- -------- -------------- (IN THOUSANDS) CONSOLIDATED BALANCE SHEET DATA: Working capital........................................... $ 65,960 $ 76,127 $102,149 $114,423 $138,704 $137,914 Total assets.............................................. 327,340 364,018 368,208 412,223 490,216 504,537 Short-term debt, including current portion of long-term obligations.............................................. 34,945 39,661 15,707 14,606 15,516 13,946 Long-term debt and non-current capital lease obligations.............................................. 89,277 92,633 83,178 85,855 96,804 94,108 Stockholders' equity...................................... 147,110 161,628 185,008 212,508 255,430 267,266 - ---------------------------------- (1) From 1990 through 1993, VLSI's fiscal year end was the last Saturday of December. In 1994, the Company changed its fiscal year end to the last Friday of December. The actual dates of the Company's fiscal year ends in the table above are December 29, 1990, December 28, 1991, December 26, 1992, December 25, 1993 and December 30, 1994. The fiscal year ended December 30, 1994 was a 53-week year. The current fiscal year is a 52-week year ending on December 29, 1995. (2) During 1994, the Company reclassified costs associated with its Technology Centers from research and development to cost of sales and marketing, general and administrative in order to make the presentation of the Company's financial statements more comparable with the financial statements of its closest competitors and to better reflect the nature of these costs. Amounts reclassified in 1990, 1991, 1992, 1993 and 1994 total $18.1 million, $18.8 million, $19.1 million, $18.4 million and $22.7 million, respectively. Cost of sales were increased $14.1 million, $14.7 million, $14.9 million, $14.2 million and $17.9 million for 1990, 1991, 1992, 1993 and 1994, respectively. Marketing, general and administrative expenses were increased $4.0 million, $4.1 million, $4.2 million, $4.2 million and $4.8 million for 1990, 1991, 1992, 1993 and 1994, respectively. (3) The quarter ended April 1, 1994 was a 14-week quarter. The quarter ended March 31, 1995 was a 13-week quarter. (4) Represents a special charge of $12.8 million reflecting the estimated cost of corporate reorganization related to exiting the memory business. (5) Represents a special charge of $22.5 million related to the de-emphasis of older technologies, costs of streamlining sales distribution channels, costs of relocating certain offices, writedowns of nonperforming assets and costs associated with intellectual property matters. (6) Represents a special charge of $1.0 million reflecting a write-off of purchased in-process research and development expenses related to the acquisition of certain assets.
12 BUSINESS VLSI is a leader in the design, manufacture and sale of highly complex application specific integrated circuits ("ASICs") -- custom designed chips for an individual customer -- and application specific standard products ("ASSPs") - -- semi-custom chips designed for a particular market application that may be used by several different customers. The Company targets high-volume markets in which it has built significant expertise and can use its library of proprietary cells and highly integrated building blocks to assist customers in designing products and bringing them to market rapidly. VLSI's target markets include the computing, communications and consumer and entertainment markets. VLSI emphasizes high performance applications where its products are critical elements of complex electronic systems. VLSI targets key OEM customers who are leaders in their respective industries. The Company's major customers include Compaq, Apple, Ericsson, Hewlett-Packard, Tellabs, Alcatel and Silicon Graphics. VLSI produces a significant portion of its wafers (approximately 73% in 1994) at its own facilities and augments internal manufacturing capacity with the foundry services of third-party wafer subcontractors. The Company believes that this strategy improves quality, cost-effectiveness, responsiveness to customers, access to capacity, ability to implement leading edge process technology and time to market, as compared to semiconductor companies that lack fabrication facilities. The semiconductor industry is, however, currently facing capacity constraints in wafer manufacturing and the availability of third-party wafer foundries has diminished significantly. Due to this manufacturing capacity shortage, as well as increased customer demand, the Company is seeking to accelerate the expansion and upgrading of its internal and external manufacturing capacity. Through its subsidiary, COMPASS Design Automation, Inc. ("COMPASS"), VLSI offers an integrated suite of electronic design automation ("EDA") software tools, foundry-flexible libraries and support services for use by systems and circuit designers at other semiconductor and systems companies, as well as at the Company, in creating complex integrated circuits. BUSINESS STRATEGY VLSI's objective is to design and manufacture highly-integrated, complex semiconductor devices that allow its customers to develop and bring to market higher value-added systems and products. Key elements in its strategy to achieve this objective include: - TARGET HIGH-VOLUME MARKETS. VLSI targets high-volume markets in which it has built significant expertise and can utilize its library of proprietary cells and high-level building blocks to assist customers in designing and bringing the customers' products to market rapidly. VLSI believes that this allows the Company to offer more value to the customer at higher gross margins for the Company. - FOCUS ON LARGE, INDUSTRY-LEADING OEM CUSTOMERS. VLSI focuses its manufacturing and research and development resources on products for OEM customers that are leaders in their respective industries. During 1994, approximately two-thirds of the Company's net revenues were derived from sales to its top 20 customers, including Compaq, Apple, Ericsson, Hewlett-Packard, Tellabs, Alcatel and Silicon Graphics. - EMPHASIZE STANDARD CELL ASICS AND ASSPS. VLSI emphasizes standard cell ASICs and ASSPs as compared to gate arrays and other design methodologies. The Company believes that the standard cell approach is a superior methodology for satisfying the size, performance and power consumption requirements of the highly complex products that form VLSI's target markets. - LEVERAGE LIBRARY OF STANDARD CELLS TO REDUCE CUSTOMERS' TIME TO MARKET. VLSI's Functional System Block ("FSB") library, an expanding collection of pre-designed cells and high-level building blocks, provides frequently used integrated circuit functions. The FSB library allows VLSI and its customers to more rapidly design and integrate products, thereby reducing VLSI's customers' time to market. VLSI's library of FSBs includes Graphics Controllers (LCD and CRT), a DES Encryption FSB, a PCI FSB, SCSI Controllers, an ARM RISC-based microprocessor (low 13 power, high performance embedded control applications), power management, communications (including standards such as DECT, CT2, GSM and PHS), signal converters, forward error correction, digital demodulation, MPEG2 and digital signal processing. - PROVIDE ENGINEERING DESIGN SUPPORT. The Company seeks to differentiate itself from its competitors not only through the quality of its products, but also through the level of its technological support and service. VLSI operates a network of geographically dispersed Technology Centers where experienced engineers with a specific technical focus work with customers to develop designs for new products and to provide continuing after-sale customer support. In 1993, VLSI established a Customer Excellence program, which is designed to foster relationships with customers through the use of teams focused on elements such as customer satisfaction, manufacturing competence and technical excellence. - EMPLOY BOTH INTERNAL AND EXTERNAL MANUFACTURING CAPACITY. VLSI produces a significant portion of its wafers (approximately 73% in 1994) at its own facilities and augments internal manufacturing capacity with the foundry services of third-party wafer subcontractors. The Company believes that this strategy improves quality, cost-effectiveness, responsiveness to customers, access to capacity, ability to implement leading edge process technology and time to market, as compared to semiconductor companies that lack fabrication facilities. The semiconductor industry is, however, currently facing capacity constraints in wafer manufacturing and the availability of third-party wafer foundries has diminished significantly. Due to this manufacturing capacity shortage, as well as increased customer demand, the Company is seeking to accelerate the expansion and upgrading of its internal and external manufacturing capacity. 14 PRODUCTS AND MARKETS VLSI shipped over 2,000 different products in 1994. The following table illustrates certain current VLSI products, their applications and customers, all as selected by the Company in its discretion. SELECTED VLSI PRODUCTS AND CUSTOMERS
TARGET MARKET SELECTED PRODUCTS AND DESCRIPTION SELECTED CUSTOMER(S) COMPUTING ASICs and ASSPs for personal Core logic chip sets for Pentium personal computers AT&T, Compaq, DEC, computers, workstations and Hewlett-Packard, mass storage application Packard Bell Core logic and multimedia ASICs for various Macintosh Apple and Apple Power PC systems licensees Core logic chip set for NexGen microprocessor NexGen ASICs for Onyx high-end 3D Graphics and high volume Silicon Graphics entry-level workstations COMMUNICATIONS ASICs and ASSPs for wireless ASICs for Titan digital access cross connect system Tellabs communication and network and voice application ASICs and ASSPs for ATM and hub/router based solutions Cisco, Newbridge, UB Networks ARM-based microcontroller for Marco-TM- wireless Motorola communicator Ericsson Signal processing and call control chips for GSM phones ASICs for digital subscriber loop and central office Alcatel, DSC application CONSUMER & ENTERTAINMENT ASICs and ASSPs for digital Forward error correction chip and QPSK demodulator for Hughes, Matsushita, satellite and cable set top satellite set top box NEC, Pioneer, Sagem, box, arcade and video game Sony, Thomson application High performance encryption engine chip AT&T EDA Electronic design automation of Top-down design tools, which include ASIC Synthesizer-TM- National complex ASICs, ICs and ASSPs and Datapath Compiler-TM- Semiconductor, Oak Technology, Silicon Graphics Physical design tools, which include a floorplanning tool Rockwell and a place and route tool Tellabs, Thomson Sub-micron physical library products Chips and Technologies, Hitachi, NEC, TI
15 RECENT DEVELOPMENTS SALE OF STOCK BY INTEL In January and February 1995, Intel sold an aggregate of 5,355,207 shares of Common Stock of the Company that it had acquired pursuant to the Intel/VLSI Stock and Warrant Purchase Agreement dated July 8, 1992. As a result, Intel is no longer a stockholder of the Company, although it currently holds a fully exercisable warrant to purchase an aggregate of 2,677,604 shares of Common Stock at an exercise price of $11.69 per share and expiring in August 1995. See "Risk Factors--Effect of Potential Stock Sales." DEVELOPMENT OF 0.35-MICRON PROCESS TECHNOLOGY WITH HITACHI In April 1995, the Company and Hitachi announced the joint development of a new 0.35-micron process technology for ASICs. The Company believes that the new process technology will be used for ASICs in the computing, communications and consumer and entertainment markets. The Company's development and initial fabrication of ASICs using the 0.35-micron process is taking place at the Company's San Antonio, Texas facility. The Company and Hitachi are parties to a joint development agreement for the development of 0.35-micron and smaller geometry process technologies, which expires in 1997. See "Risk Factors -- Manufacturing Risks." TI LITIGATION In July 1990, Texas Instruments filed two actions against the Company and four other defendants, Analog Devices, Inc., Integrated Device Technology, Inc. ("IDT"), LSI Logic Corporation and Cypress Semiconductor Corporation (the Company and such other defendants are collectively referred to as the "TI Defendants"). IDT settled its cases with TI in late December 1992. In the action filed before the United States International Trade Commission ("ITC"), TI sought to exclude from importation into the U.S. all TI Defendants' products manufactured outside the U.S. that allegedly utilize a plastic encapsulation process described in U.S. Patent No. 4,043,027 (the "027 patent"). On October 15, 1991, the Administrative Law Judge ("ALJ") found the 027 patent to be valid and infringed by the Company's old plastic encapsulation gating process. However, a new plastic encapsulation gating process developed and used by the TI Defendants was found not to infringe the 027 patent. In December 1991, the full ITC determined that it would not consider TI's appeal to overturn the ALJ's decision on noninfringement of the new process. The United States Court of Appeals for the Federal Circuit affirmed the ITC decision in March 1993. The 027 patent has since expired. TI also filed a patent infringement action against the TI Defendants in the United States District Court for the Northern District of Texas seeking an injunction against the sale and/or manufacture by the TI Defendants of products that allegedly infringe the 027 patent. The action also sought damages for alleged past infringement of the 027 patent and now expired U.S. Patent No. 43,716,764. A trial for this matter was held in April 1995, which resulted in a May 1995 verdict against VLSI for $19.4 million. The Company intends to contest the verdict. However, the Company will record a charge to earnings of $19.4 million in the second quarter of 1995. Based on the jury's finding that the alleged infringement was intentional, TI may also request that the judge award treble damages. In the event that treble damages are awarded, the judgment could result in a material reduction in liquidity, as well as an increased impact on the Company's reported results of operations. 16 UNDERWRITING Subject to the terms and conditions set forth in an underwriting agreement (the "Underwriting Agreement"), the Company has agreed to sell to each of the Underwriters named below (the "Underwriters"), for whom Salomon Brothers Inc, Bear, Stearns & Co. Inc., Hambrecht & Quist LLC and Montgomery Securities are acting as Representatives (the "Representatives"), and each of the Underwriters has severally agreed to purchase from the Company, the number of shares set forth opposite its name below:
NUMBER OF SHARES UNDERWRITERS TO BE PURCHASED - ------------------------------------------------------------------------------------ ------------------ Salomon Brothers Inc ............................................................... Bear, Stearns & Co. Inc. ........................................................... Hambrecht & Quist LLC............................................................... Montgomery Securities............................................................... ---------- Total............................................................................. 3,000,000 ---------- ----------
In the Underwriting Agreement, the several Underwriters have agreed, subject to the terms and conditions set forth therein, to purchase all the shares of Common Stock offered hereby if any such shares are purchased. The Company has been advised by the Representatives that they propose initially to offer part of the shares of Common Stock offered hereby directly to the public at the public offering price set forth on the cover page of this Prospectus and part to certain dealers at such price less a concession not in excess of $ per share. The Underwriters may allow, and such dealers may reallow, a concession not in excess of $ per share to certain other dealers. After the closing of the offering, the public offering price and such concessions may be changed. The Company has granted to the Underwriters an option, exercisable during the 30-day period after the date of this Prospectus, to purchase up to an additional 450,000 shares of Common Stock at the same price per share as the initial 3,000,000 shares to be purchased by the Underwriters. The Underwriters may exercise such option only to cover over-allotments in the sale of the shares of Common Stock that the Underwriters have agreed to purchase. To the extent that the Underwriters exercise such option, each Underwriter will have a firm commitment, subject to certain conditions, to purchase option shares in the same proportion as the number of shares of Common Stock to be purchased and offered by such Underwriter in the table above bears to the total number of shares of Common Stock initially offered by the Underwriters hereby. 17 The Company has agreed that it will not, without the prior written consent of Salomon Brothers Inc, sell, offer or contract to sell or otherwise dispose of directly or indirectly (except as required upon the exercise of warrants), or announce the offering of, any shares of Common Stock or any securities convertible into, or exchangeable for, Common Stock, except those offered hereby, for a period of 90 days from the date of the Underwriting Agreement. The foregoing notwithstanding, the Company may during such period issue or sell shares of its Common Stock pursuant to the Company's existing stock option and stock purchase plans. Furthermore, all directors and executive officers of the Company have agreed that they will not offer, sell or contract to sell, or otherwise dispose of, any shares of Common Stock for a period of 90 days from the date of the Underwriting Agreement without the prior written consent of Salomon Brothers Inc (other than shares disposed of as BONA FIDE gifts or shares of Common Stock delivered to the Company in order to exercise, but not dispose of shares of Common Stock received pursuant to the exercise of, stock options). In connection with the offering, certain Underwriters and selling group members who are qualifying registered market makers on Nasdaq may engage in passive market-making transactions in the Common Stock on Nasdaq in accordance with Rule 10b-6A under the Exchange Act during the two business day period before commencement of offers or sales of the Common Stock in the offering. Passive market making transactions must comply with certain volume and price limitations and be identified as such. In general, a passive market maker may display its bid at a price not in excess of the highest independent bid for the security, and if all independent bids are lowered below the passive market maker's bid, then such bid must be lowered when certain purchase limits are exceeded. The Underwriting Agreement provides that the Company will indemnify the several Underwriters against certain liabilities, including liabilities under the Act, or contribute to payments the Underwriters may be required to make in respect thereof. LEGAL MATTERS The validity of the securities offered hereby will be passed upon for the Company by Wilson, Sonsini, Goodrich & Rosati, Professional Corporation, Palo Alto, California, and for the Underwriters by Latham & Watkins, San Francisco, California. EXPERTS The consolidated financial statements and schedule of VLSI Technology, Inc. included in the Company's Annual Report (Form 10-K) for the year ended December 30, 1994, have been audited by Ernst & Young LLP, independent auditors, as set forth in their report thereon included therein and incorporated herein by reference. Such consolidated financial statements and schedule have been incorporated herein by reference in reliance upon such report given upon the authority of such firm as experts in accounting and auditing. 18 NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY OF THE UNDERWRITERS. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE AS OF WHICH INFORMATION IS GIVEN IN THIS PROSPECTUS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. ------------------- TABLE OF CONTENTS
PAGE ----- Available Information.......................... 2 Information Incorporated by Reference.......... 2 Prospectus Summary............................. 3 Risk Factors................................... 5 Use of Proceeds................................ 10 Price Range of Common Stock and Dividend Policy....................................... 10 Capitalization................................. 11 Selected Consolidated Financial Data........... 12 Business....................................... 13 Recent Developments............................ 16 Underwriting................................... 17 Legal Matters.................................. 18 Experts........................................ 18
3,000,000 SHARES [LOGO] COMMON STOCK ($.01 PAR VALUE) SALOMON BROTHERS INC BEAR, STEARNS & CO. INC. HAMBRECHT & QUIST MONTGOMERY SECURITIES PROSPECTUS DATED , 1995 VLSI TECHNOLOGY, INC. AMENDMENT NO. 1 TO REGISTRATION STATEMENT ON FORM S-3 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION The following table sets forth the various costs and expenses payable by the Company, other than underwriting discounts and commissions, with respect to the sale and distribution of the securities being registered. All of the amounts shown are estimates except the Securities and Exchange Commission registration fee and the NASD filing fee. SEC Registration Fee............................................. $ 32,344 NASD Filing Fee.................................................. 9,880 Nasdaq Additional Listing Fee.................................... 17,500 Blue Sky Fees and Expenses....................................... 7,500 Legal Fees and Expenses.......................................... 100,000 Accounting Fees and Expenses..................................... 60,000 Printing and Engraving........................................... 75,000 Transfer Agent and Registrar Fees................................ 5,000 Miscellaneous.................................................... 17,776 --------- Total........................................................ $ 325,000 --------- ---------
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS The Company has the power, pursuant to Section 145 of the Delaware General Corporation Law, to limit the liability of directors to the Company for certain breaches of fiduciary duty and to indemnify its directors, officers and other persons for certain acts. The Company's Restated Certificate of Incorporation, as amended, includes the following provision: "11. LIMITATION OF DIRECTORS' LIABILITY. To the fullest extent permitted by the Delaware General Corporation Law as the same exists or as it may hereafter be amended, a director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. Neither any amendment nor repeal of this Article 11, nor the adoption of any provision of this Certificate of Incorporation inconsistent with this Article 11, shall eliminate or reduce the effect of this Article 11 in respect of any matter occurring, or any cause of action, suit or claim that, but for this Article 11, would accrue or arise, prior to such amendment, repeal or adoption of an inconsistent provision." Article VI of the Bylaws of the Company provides that the Company shall indemnify certain agents of the Company against judgments, fines, settlements and other expenses arising from such person's agency relationship with the Company provided that the standard of conduct set forth therein is met. The effect of Article VI is to require that the Company provide indemnification to such agents to the maximum extent permitted by the Delaware General Corporation Law. Agents covered by this indemnification provision include current and former directors and officers of the Company, as well as persons who serve at the request of the Company as directors, officers, employees or agents of another enterprise. In addition, the Company has entered into indemnification agreements with each of its directors and certain of its officers. The indemnification agreements are based on the provisions of Section 145 of the Delaware General Corporation Law and attempt to provide the directors and officers of the Company with the maximum indemnification allowed under Delaware law. In certain instances, they may result in an expansion of the substantive protection available to such individuals under the Restated Certificate of Incorporation and the Bylaws. The Company currently maintains directors' and officers' liability insurance, but the policy does not provide coverage for liabilities arising under the Securities Act. II-1 Reference is also made to Section 8 of the Underwriting Agreement contained in Exhibit 1.1 hereto, indemnifying officers and directors of the Registrant against certain liabilities. ITEM 16. EXHIBITS
EXHIBIT NUMBER DESCRIPTION - --------- -------------------------------------------------------------------------------------------------------- 1.1(6) Preliminary Form of Underwriting Agreement. 2.1(1) Plan of Liquidation and Dissolution of VISIC, Inc. 2.2(2) VISIC, Inc. Liquidating Trust Agreement, dated as of December 18, 1990. 4.1(3) Restated Certificate of Incorporation of the Company, filed September 16, 1987. 4.2(4) Certificate of Designation of Rights, Preferences and Privileges of Series A Participating Preferred Stock, filed August 12, 1992. 4.3(4) Certificate of Amendment of Restated Certificate of Incorporation, filed August 20, 1992. 4.4(6) Certificate of Amendment of Restated Certificate of Incorporation, filed May 5, 1995. 4.5(5) Indenture, dated as of May 1, 1987, between the Company and Citibank N.A., Trustee, with respect to issuance of $57,500,000 of 7% Convertible Subordinated Debentures due May 1, 2012. 4.6(5) Form of 7% Convertible Subordinated Debenture due May 1, 2012. 4.7(4) First Amended and Restated Rights Agreement, dated as of August 12, 1992, by and between the Company and the First National Bank of Boston, as Rights Agent, and Amendment No. 1 thereto dated August 24, 1992. 4.8(4) Warrant dated August 25, 1992 issued to Intel Corporation. 5.1 Opinion of Wilson, Sonsini, Goodrich & Rosati, Professional Corporation, regarding legality of securities being registered. 23.1 Consent of Ernst & Young LLP, Independent Auditors (see page II-5). 23.2 Consent of Counsel (included in Exhibit 5.1). 24.1(6) Power of Attorney (see page II-4). - ------------------------ (1) Incorporated by reference from Exhibit to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended September 29, 1990. (2) Incorporated by reference from Exhibit to the Company's Annual Report on Form 10-K for the fiscal year ended December 29, 1990. (3) Incorporated by reference from Exhibit to the Company's Annual Report on Form 10-K for the fiscal year ended December 27, 1987. (4) Incorporated by reference from Exhibit to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended September 26, 1992. (5) Incorporated by reference from Exhibit to the Company's Registration Statement on Form S-3 (File No. 33-13463). (6) Previously filed.
ITEM 17. UNDERTAKINGS The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the Registration Statement shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to provisions described in Item 15 II-2 hereof or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. The undersigned Registrant hereby undertakes that: (1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of Prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of Prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective. (2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of Prospectus shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. II-3 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant, VLSI Technology, Inc., a corporation organized and existing under the laws of the State of Delaware, certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Jose, State of California, on the 14th day of June, 1995. VLSI Technology, Inc. By: /s/ ALFRED J. STEIN ------------------------------------ Alfred J. Stein, CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE OFFICER Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated:
SIGNATURE TITLE DATE - ------------------------------------------------- ------------------------- ------------- Chairman of the Board, Chief Executive Officer /s/ ALFRED J. STEIN and President June 14, 1995 ------------------------------------------- (Principal Executive (Alfred J. Stein) Officer) and Director Vice President, Finance /s/ GREGORY K. HINCKLEY* and Chief Financial ------------------------------------------- Officer (Principal June 14, 1995 (Gregory K. Hinckley) Financial Officer) /s/ BALAKRISHNAN S. IYER* Vice President and ------------------------------------------- Controller (Principal June 14, 1995 (Balakrishnan S. Iyer) Accounting Officer) ------------------------------------------- Director June , 1995 (Pierre S. Bonelli) ------------------------------------------- Director June , 1995 (Robert P. Dilworth) /s/ JAMES J. KIM* ------------------------------------------- Director June 14, 1995 (James J. Kim) /s/ HORACE H. TSIANG* ------------------------------------------- Director June 14, 1995 (Horace H. Tsiang) *By: /s/THOMAS C. TOKOS (Thomas C. Tokos, Attorney-in-fact)
II-4 CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS We consent to the reference to our firm under the captions "Selected Consolidated Financial Data" and "Experts" in this Amendment No. 1 to Registration Statement (Form S-3) and the related Prospectus of VLSI Technology, Inc. for the registration of its common stock and to the incorporation by reference therein of our report dated January 17, 1995, with respect to the consolidated financial statements and schedule of VLSI Technology, Inc. included in its Annual Report (Form 10-K) for the year ended December 30, 1994, filed with the Securities and Exchange Commission. ERNST & YOUNG LLP San Jose, California June 14, 1995 II-5 VLSI TECHNOLOGY, INC. REGISTRATION STATEMENT ON FORM S-3 EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION - --------- ----------------------------------------------------------------------------------------- 1.1(6) Preliminary Form of Underwriting Agreement. 2.1(1) Plan of Liquidation and Dissolution of VISIC, Inc. 2.2(2) VISIC, Inc. Liquidating Trust Agreement, dated as of December 18, 1990. 4.1(3) Restated Certificate of Incorporation of the Company, filed September 16, 1987. 4.2(4) Certificate of Designation of Rights, Preferences and Privileges of Series A Participating Preferred Stock, filed August 12, 1992. 4.3(4) Certificate of Amendment of Restated Certificate of Incorporation, filed August 20, 1992. 4.4(6) Certificate of Amendment of Restated Certificate of Incorporation, filed May 5, 1995. 4.5(5) Indenture, dated as of May 1, 1987, between the Company and Citibank N.A., Trustee, with respect to issuance of $57,500,000 of 7% Convertible Subordinated Debentures due May 1, 2012. 4.6(5) Form of 7% Convertible Subordinated Debenture due May 1, 2012. 4.7(4) First Amended and Restated Rights Agreement, dated as of August 12, 1992, by and between the Company and the First National Bank of Boston, as Rights Agent, and Amendment No. 1 thereto dated August 24, 1992. 4.8(4) Warrant dated August 25, 1992 issued to Intel Corporation. 5.1 Opinion of Wilson, Sonsini, Goodrich & Rosati, Professional Corporation, regarding legality of securities being registered. 23.1 Consent of Ernst & Young LLP, Independent Auditors (see page II-5). 23.2 Consent of Counsel (included in Exhibit 5.1). 24.1(6) Power of Attorney (see page II-4). - ------------------------ (1) Incorporated by reference from Exhibit to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended September 29, 1990. (2) Incorporated by reference from Exhibit to the Company's Annual Report on Form 10-K for the fiscal year ended December 29, 1990. (3) Incorporated by reference from Exhibit to the Company's Annual Report on Form 10-K for the fiscal year ended December 27, 1987. (4) Incorporated by reference from Exhibit to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended September 26, 1992. (5) Incorporated by reference from Exhibit to the Company's Registration Statement on Form S-3 (File No. 33-13463). (6) Previously filed.
EX-5.1 2 LEGAL OPINION EXHIBIT 5.1 [WILSON, SONSINI, GOODRICH & ROSATI LETTERHEAD] June 15, 1995 VLSI Technology, Inc. 1109 McKay Drive San Jose, California 95131 RE: REGISTRATION STATEMENT ON FORM S-3 Ladies and Gentlemen: We have examined the Registration Statement on Form S-3 filed by you with the Securities and Exchange Commission (the "SEC") on June 7, 1995 (file No. 33-60049), as proposed to be amended by Amendment No. 1 thereto proposed to be filed by you with the SEC on or about June 15, 1995, in connection with the registration under the Securities Act of 1933, as amended, of 3,450,000 shares of your Common Stock, $0.01 par value (the "Shares"), all of which are authorized but heretofore unissued, including an over-allotment option for 450,000 shares held by the underwriters. The Shares are to be sold to the underwriters for resale to the public as described in the Registration Statement pursuant to the Underwriting Agreement filed as Exhibit 1.1 thereto. As your outside legal counsel, in connection with this transaction, we have examined the proceedings taken or proposed to be taken in connection with said sale and issuance of the Shares. It is our opinion that, upon completion of the proceedings being taken or contemplated by us, as your outside legal counsel, to be taken prior to the issuance of the Shares, and upon completion of the proceedings being taken in order to permit such transactions to be carried out in accordance with the securities laws of the various states where required, the Shares, when issued and sold in the manner referred to in the Registration Statement, will be legally and validly issued, fully paid and non-assessable. We consent to the use of this opinion as an exhibit to the Registration Statement, including the prospectus constituting a part thereof, and any amendment thereto. Very truly yours, WILSON, SONSINI, GOODRICH & ROSATI Professional Corporation /s/ WILSON, SONSINI, GOODRICH & ROSATI -----END PRIVACY-ENHANCED MESSAGE-----