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LSI Sells Fab for $105M, Goes Fabless

Photonics.com
Apr 2006
MILPITAS, Calif., April 6 -- LSI Logic Corp. announced today that it will sell its Gresham, Ore., semiconductor manufacturing facility to Phoenix-based Semiconductor Components Industries LLC for approximately $105 million in cash as part of its plan to become a fabless manufacturer.

The agreement calls for Semiconductor Components, On Semiconductor Corp.'s primary operating subsidiary, to buy the 83-acre wafer fabrication facility campus, which includes 500,000 sq ft of floor space with 98,000 sq ft of cleanroom space. The assets to be purchased also include a 200 mm-capable toolset and equipment that can produce 18,000 8-in. wafers per month.

Under the agreement terms, Semiconductor Components will keep "substantially all" of LSI's Gresham-based manufacturing employees, with the non-manufacturing workforce given the opportunity to continue with LSI. LSI is the second-largest manufacturing employer in Gresham with a workforce of approximately 550. Semiconductor Components will also sign a multiyear wafer supply and test agreement and agreements for intellectual property licensing, transition services and facilities use with LSI.

"We are very pleased to have secured a buyer interested in both the advanced manufacturing capabilities and the experienced workforce associated with our Gresham facility," said Abhi Talwalkar, LSI president and CEO. "As a result of today's agreement, we anticipate providing uninterrupted service to customers while enhancing LSI competitiveness as we continue to execute our fabless manufacturing strategy."

LSI said it wants to expand its working relationships with major foundry partners to eventually produce advanced semiconductors using 65-nm and below process technology on 300-mm, or 12-in., wafers.

In September 2005, LSI said it was going to become a fabless semiconductor manufacturer to better serve its global customer base, reduce production costs and be able to take advantage of ever-newer process technologies, and announced the sale of its Gresham facility. At the time LSI said it expected the search for a buyer to take a year, but it anticipates closing the transaction several months ahead of that timeframe. LSI said it expects to close the deal, which is subject to regulatory approvals and other closing conditions, in the next 45 days.

For more information, visit: www.lsilogic.com



GLOSSARY
wafer
A cross-sectional slice cut from an ingot of either single-crystal, fused, polycrystalline or amorphous material that has refined surfaces either lapped or polished. Wafers are used either as substrates for electronic device manufacturing or as optics. Typically, they are made of silicon, quartz, gallium arsenide or indium phosphide.
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