DigitalOptics Refocuses on MEMS, Drops Vertical Integration

DigitalOptics Corp. (DOC) will consolidate its manufacturing capabilities in Taiwan, cease operations in its leased facility in China and terminate its lens manufacturing program as part of a refocusing strategy announced by parent company Tessera Technologies Inc. In November, the company announced that it was ceasing operations at its sites in Tel Aviv and in Charlotte, N.C., axing 40 percent of its workforce in the process.

The restructuring is expected to reduce operating expenses and corporate overhead by approximately $78 million, or 45 percent, on an annualized basis for 2013, as compared with 2012, the company said.

DOC will no longer be a vertically integrated camera module supplier, but will instead focus its strategy on differentiated microelectromechanical systems (MEMS)-related technologies. The company also will partner with third-party manufacturers to produce other components of the full camera module. It will continue to produce the mems | cam technology through the rest of the year and expects to ship small production volumes of the technology in 2013.

The strategy is the result of a business review directed by a committee of independent directors led by Novellus Systems’ former chairman and CEO Richard S. Hill. The committee worked with management to evaluate business opportunities, strategy and operating model.

“DOC’s recently launched mems | cam technology is a disruptive technology that will be an inflection point in — and the future of — imaging solutions in the smartphone, tablet and other mobile imaging segments,” Hill said. “Given the emerging acceptance of the mems | cam technology in the marketplace, we can now shift our strategy to focus on the areas of manufacturing where we have a defensible, differentiated advantage and better leverage our manufacturing partners.”

“The actions we are taking today will help to ensure our long-term competitive viability and a meaningful success in our business in 2014 and beyond,” said John S. Thode, who was named DOC’s president in February.

For more information, visit: www.tessera.com