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13 May 2008


Freescale to close Tempe GaAs fab

Freescale Semiconductor Corp of Austin, TX, USA says that, over the next few months, it will close its ‘CS-1’ 150mm gallium arsenide wafer fab in Tempe, AZ, according to a report in The Arizona Republic.

The 38,000ft² fab started production in 1991 and makes mainly GaAs power amplifier (PA) products for cell-phone makers (predominantly Motorola, which at one point accounted for about 80% of Freescale’s wireless IC revenues).

Freescale was formerly the Motorola semiconductor products sector (SPS) until being spun off in 2004. In late 2006, it was acquired for $17.6bn by a private-equity consortium led by the Blackstone Group and The Carlyle Group, which took the company private. The firm has since been hit by declining sales at both Motorola and US car makers (for which it makes automotive ICs). In 2007, revenues fell 10% to about $5.7bn, and about 700 of the firm’s 23,000 global workforce were laid off.

Last October Freescale sold its GaAs-based RF PA business (including the PA designs, intellectual property, inventory and some equipment from the plant) to GaAs component maker Skyworks Solutions Inc of Woburn, MA. The firm retained assets including the buildings, property and some equipment, and continued to operate the fab. It subsequently tried to sell the fab, but no buyers materialized. “With the amount of work we were doing there, we couldn’t justify keeping it open,” said Freescale spokesman Rob Hatley, according to The Arizona Republic report. The Tempe fab’s 100 or so staff will be offered severance packages or the opportunity to apply for jobs at other Freescale facilities, he added.

The firm’s R&D facilities in Tempe are unaffected, Hatley says. The closure leaves it with six silicon wafer fabs: two in Austin, one in Chandler, AZ, one in East Kilbride, Scotland, UK, one in Toulouse, France and one in Sendai, Japan.

Freescale has also been trying to sell the East Kilbride 150mm silicon fab since last fall. However, according to another report in the Austin American Statesman, last week the firm told the 1000 staff there that a sale is unlikely. It now is engaged in an open-ended “formal consultation” with workers to consider other options for the Scotland operations, including closing them.

See related item:

Skyworks double earnings, driven by multi-mode FEMs and linear products

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