SANTA CLARA, Calif.--Integrated Device Technology Inc. today announced it will close a six-inch wafer fab in Salinas, Calif., and transfer production to its eight-inch facility in Hillsboro, Ore., in a move to cut costs and accelerate the migration of IC products to more advanced process technologies.
Santa Clara-based IDT said the Salinas plant will be closed in the second half of 2002, eliminating about 260 jobs in manufacturing and support positions. The closure will not impact the company's business groups in Salinas, which handle SRAMs, multi-port devices, and Internet Protocol (IP) co-processors. Those business groups employ about 90 people in Salinas.
"IDT's long-term strategy is to migrate toward the advanced process technologies required for our next-generation of products," said Jerry Taylor, chief executive officer of IDT. "Because of the current economic downturn, it has become very challenging to cost-effectively load the Salinas facility with the older technologies it supports.
"While economic conditions have accelerated the need to consolidate production volumes in the Hillsboro facility, we have the manufacturing infrastructure in place to support both our short- and long-term needs," he added.
The company's Salinas production facility began operations in 1985, and currently, the six-inch wafer fab has the capacity to process 45,000 wafers per quarter. The plant's technology ranges from 0.8- to 0.35-micron processes, but it is not able to support IDT's new product designs with feature sizes below 0.35 micron, according to the company. Currently, IDT's five-year-old Hillsboro fab primarily produces ICs with 0.18-micron technology, and it will be used to begin 0.14-micron production in 2002, the company said.
In addition to migrating products to more advanced processes, the consolidation of production at one facility will improve IDT's financial performance in 2002 without impacting its revenues in targeted markets, said Alan Krock, chief financial officer of the Silicon Valley chip maker. "Further, management also believes that the non-recurring costs associated with the facility closure will be fully offset by gains realized by IDT from the sale of other investments during the quarter ended December 2001," he added.
The shutdown of the California fab will reduce IDT's total headcount by nearly 7%.
IDT is scheduled to release its fiscal third quarter results on Jan. 22.
