Cypress Semiconductor (CY) stock got an unusually large dark pool order after the news hit that Qualcomm is using Deca Technologies’ M-Series fan-out wafer-level packaging technology for power management integrated circuit (PMIC) devices in Samsung’s flagship S10 handset, along with the Xiaomi Mi 9 and LG G8 handsets.

Deca Technologies power management technology is being used in Samsung’s market leading S10 smartphone by Qualcomm.

A remarkable development within the initial application is the use of M-Series fan-out technology to create a “protected fan-in WLCSP” where all the solder balls remain within the silicon area. Deca’s patented M-Series structure and methods are used to encapsulate the active semiconductor side and four surrounding vertical sidewalls of the device. Additionally, Deca’s patented Adaptive Patterning™ technology is used in the design and manufacturing processes.

Utilization of Deca’s M-Series processes to encapsulate and protect the device allows both integrated circuit (IC) producers and original equipment manufacturers (OEMs) to approach zero defects related to silicon cracking or chipping.

Sidewall chipping of conventional fan-in wafer-level chip-scale packages (WLCSPs) remains a key quality concern for cell phone OEMs and IC companies throughout the supply chain. Chipping or cracking defects can arise during device singulation, in shipping or in the board mounting process due to the exposed silicon. Adopting M-Series FOWLP mitigates this problem.

“A growing community of semiconductor customers and end electronic product OEMs is taking notice of the benefits that M-Series can provide. Outstanding board level reliability performance coupled with extreme miniaturization vs. competing alternatives is the starting point,” said Garry Pycroft, VP Sales & Marketing at Deca Technologies. “The fully protected nature not only drives elimination of silicon cracking and chipping, it also provides benefit for light-sensitive devices, blocking over 10X the ambient light compared with conventional fan-in WLCSP. Radio frequency device users also see improved electrical performance capabilities with the unique dielectric structure between the active device and redistribution layers.”

Cypress Semiconductor is a major investor in Deca Technologies.

The unusual dark pool print was for 311,400 shares at $23.01 for an estimated value of $7.1 million.

Unusual dark pool print in CY stock on August 21, 2019

Cypress has announced it will hold a special meeting of stockholders on August 27, 2019 to approve the previously announced Agreement and Plan of Merger, dated June 3, 2019, which provides for Infineon Technologies AG to acquire Cypress for $23.85 per share in cash, corresponding to an enterprise value of approximately $10 billion.

All stockholders of record at the close of business on July 11, 2019 may attend in person and are entitled to receive notice of, and to vote at, the special meeting. The special meeting will be held at 10:00 a.m. Pacific Time at Cypress’ headquarters at 198 Champion Court, San Jose, California 95134.

I think what happened is that a big institutional client negotiated a lower price than the $23.85 purchase price and is looking to make money off the spread between $23.01 and $23.85. While it might not seem like much of a spread, it’s a cool $261,576 the institution will make if the deal is approved next week.

For individual traders, I think we should stay out of CY stock as the spread is too tight for us to make a good profit.

Disclosure: We do not hold any position in CY stock.

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