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August 25, 2014
08:33 EDTFCSFairchild to eliminate internal five-inch wafer fabrication lines
Fairchild Semiconductor announced it will eliminate its internal five-inch and significantly reduce six-inch wafer fabrication lines, resulting in the closure of its manufacturing and assembly facilities in West Jordan, Utah and Penang, Malaysia, as well as the remaining five-inch wafer fabrication lines in Bucheon, South Korea. This realignment is part of Fairchild’s ongoing initiative to enhance manufacturing capabilities, improve product quality, and lower costs resulting in greater supply chain flexibility and responsiveness for our customers. Closures of both facilities and Fairchild’s remaining five-inch wafer fabrication lines in Bucheon, South Korea, are planned to occur from Q2 to Q4 2015. Fairchild is working closely with customers to complete the qualifications required and/or build adequate supply to support their needs. During the transition, Fairchild expects its internal and external supply chain to service customer orders without disruption. Through the combined actions, Fairchild expects to incur approximately $36M in cash restructuring and other costs. The company also plans to record during the closure process non-cash charges of approximately $25M for accelerated depreciation. Once completed, the company expects to realize annual savings of approximately $45M-$55M from a second quarter of 2014 financial baseline. Of these estimated savings, approximately 75% are expected to be cash savings, with the balance attributable to lower depreciation costs.
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