Fairchild Closes Wafer Plant

Fairchild Semiconductor has announced that it will close its wafer fabrication plant in Mountaintop, Pa., and, eventually, the site itself as well as one of its wafer fabs in Bucheon, South Korea. According to Fairchild, the move will streamline and consolidate wafer manufacturing.

These actions are consistent with the company’s ongoing cost-reduction strategy and the need to align manufacturing capacity with end demand. Most products currently made at the Mountaintop site will be transferred to other internal sites. A small office will be maintained in the area for technology and product line functions.

The South Korean site will close its 4-in. line and transfer-associated manufacturing to its 5- and 6-in. wafer fabs. Fairchild will work closely with customers during the process to ensure a seamless transition.

“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,” said Mark Thompson, who is president, chairman and CEO. “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, and these changes will simplify operations, improve productivity and reduce costs.”

The company anticipates that the consolidation of the South Korea fabrication processes and the closure of the Mountaintop facility will be completed by June 2010. According to Fairchild, the company expects to incur approximately $18 million to $23 million cash charges, primarily for severance and other costs associated with transfer activities beginning in the second quarter.

The company also will take additional noncash charges of approximately $25 million to $30 million for impairments and accelerated depreciation over the course of the next six quarters. In addition, roughly 200 jobs will be eliminated at the Mountaintop site. Once completed, the company expects to realize annual savings ranging from $20 million to $25 million.

For more information, visit: www.fairchildsemi.com