Wed, Aug 27, 2014 - Page 13 News List

Fairchild set to close chip plants, cut staff up to 15%

Bloomberg

US-based Fairchild Semiconductor International Inc, one of the integrated chip industry’s oldest companies, is to close aging plants and cut as much as 15 percent of its workforce as it shifts production to outside manufacturers.

Factories are to be closed in West Jordan, Utah; Penang, Malaysia; and Bucheon, South Korea, the company said yesterday in a statement.

The closures might affect up to 15 percent of Fairchild’s about 9,000 employees, spokesman Bruce Fienberg said.

The total number of job cuts has not been set, he said.

Like other sector participants, Fairchild is paring internal production and instead making more use of foundries, such as Taiwan Semiconductor Manufacturing Co (台積電).

San Jose, California-based Fairchild, one of the pioneers of the chip industry in the 1950s, was eclipsed years ago by companies founded by former employees.

The two most famous former staffers, Gordon Moore and Robert Noyce, built Intel Corp into the world’s largest manufacturer of semiconductors.

“An adaptive supply chain must be the foundation of any global manufacturer’s operations in the increasingly dynamic semiconductor solutions market,” Fairchild chief executive officer Mark Thompson said in the statement.

Fairchild, a manufacturer of power converters, amplifiers and switches used in vehicles and consumer electronics, estimated that the plant closures would result in restructuring and other costs of about US$36 million.

It also projected US$25 million in depreciation charges.

Last year, the company’s revenue was unchanged at US$1.41 billion following a 12 percent decline in 2012.

The plant closures, which are to take place from the second to fourth quarters of next year, are expected to bring annual savings of between US$45 million and US$55 million.

Operations at more advanced plants in South Portland, Maine; Mountain Top, Pennsylvania; and Bucheon are to continue, the company said.

Fairchild shares fell less than 1 percent to US$16.91 at the close of trading in New York on Monday, leaving the stock up 27 percent this year.

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