Veeco Instruments has agreed to acquire Applied Epi, a St. Paul, Minn., manufacturer of molecular beam epitaxy equipment used in making high-speed III-V compound semiconductor devices for photonic and electronic devices.

The acquisition will cost Veeco 4 million shares of stock and $30 million in cash, but will immediately quadruple its active deposition equipment sales, said Edward Braun, Veeco's president and CEO.

Braun said that Applied Epi's customer list includes the wafer supplier that Motorola used in developing its new GaAs-on-silicon technology. He predicted that integrating high-speed compound semiconductors with low-cost silicon will reduce the cost of photonic devices by a factor of 10 and allow them to run 35 times faster than today's devices.