Power management and analog microchip maker Fairchild Semiconductor has announced plans to streamline and consolidate wafer manufacturing and cut approximately 200 jobs as part of an ongoing cost-reduction program.
The company plans to close its wafer fabrication plant in Mountaintop, Pennsylvania, and one of its wafer fabs in Bucheon, South Korea. It will transfer most of the products currently manufactured at the Mountaintop site to other internal sites but will maintain a small office for technology and product line functions. It will close its four-inch line in South Korea and will transfer associated manufacturing to its five and six-inch wafer fabs.
Fairchild said the cuts will enable it to make annual savings of $20m to $25m. It expects to incur approximately $18m to $23m severance and impairment charges of approximately $25m to $30m over the next six quarters.
Mark Thompson, president, chairman and chief executive at Fairchild, said: Sizing our manufacturing footprint and keeping our cost structure competitive are requirements for the long-term health of our company and drive this production consolidation. These actions reduce the number of wafer fabs in the company from six to four, and the number of front end manufacturing sites from four to three. We are committed to staying cost competitive in these hard economic times.
In fiscal 2008 the company reported a net loss of $167.4m against a profit of $64m in 2007, on revenue down 7% at $455.4m.