SUNNYVALE, Calif.--Advanced Micro Devices Inc. today announced it will close two aging six-inch wafer fabs in Austin, Tex., and eliminate 2,300 jobs, or about 15% of its workforce, by the end of the second quarter of 2002 as part of a restructuring of its manufacturing operations.
AMD said about 1,000 jobs will be eliminated in Austin with the closing of Fabs 14 and 15. Both six-inch fabs were built in the middle of the 1980s, and they have been primarily used by AMD as foundries to produce programmable logic devices and communications ICs, based on 0.7-micron CMOS technologies.
An AMD spokesman here told SBN that Fabs 14 and 15 have been fabricating PLDs for Lattice Semiconductor Corp., which acquired AMD's Vantis programmable logic subsidiary in 1999, and communication ICs for Legerity Inc., which spun out of AMD in August 2000. Low volumes for these products no longer support the two six-inch wafer fabs, the spokesman said.
The rest of AMD's planned job cuts will come from a realignment and restructuring of backend chip-packaging operations in Penang, Malaysia. The final assembly facility has been used to finish PLD and communications ICs for Lattice and Legerity. AMD has also decided to transfer final assembly of memory products to the company's facility in Suzhou, China, near Shanghai, said the company spokesman.
The restructuring and phase out of foundry production activities will enable AMD to focus more resources on its core microprocessor and flash memory businesses, said W.J. (Jerry) Sanders, chairman and CEO of AMD.
"These actions will allow us to reduce costs without impairing our new product development activities in pursuit of long-term growth opportunities," said the chief executive. "We will focus our organization around our two most promising opportunities -- flash memory devices and PC processors."
Fabs 14 and 15 are AMD's two oldest chip-processing plants. Fab 14 was built in 1984 and Fab 15 in 1985. The cutbacks will not impact AMD's Fab 25 plant in Austin and Fab 30 in Dresden, Germany.
AMD said it will take a one-time charge between $80-to-$110 million to cover these restructuring activities and other special charges in the current quarter. When fully implemented, these actions are expected to result in an overall annual cost reduction of about $125 million, according to the Sunnyvale company.
