Fairchild Semiconductor to close two wafer fabs

Fairchild Semiconductor, a leading global supplier of high-performance products that drive energy efficiency, on March 26 announced plans to streamline and consolidate wafer manufacturing. The company will close its wafer fabrication plant in Mountaintop, Pa., leading to a closure of the site and one of its wafer fabs in Bucheon, South Korea.

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 for technology and product line functions in the Mountaintop area. The South Korea site will close its 4-inch line and transfer associated manufacturing to its 5 and 6-inch 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, 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 the consolidation of the South Korea fabrication processes and the closure of the Mountaintop facility will be completed by June, 2010. Fairchild expects to incur approximately $18 million to $23 million of cash charges, primarily for severance and other costs associated with transfer activities beginning in the second quarter. The company will also take additional non-cash 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 as a result of these closures.

About Fairchild Semiconductor

Fairchild Semiconductor is a global leader delivering energy-efficient power analog and power discrete solutions. Fairchild provides leading-edge silicon and packaging technologies, manufacturing strength and system expertise for consumer, communications, industrial, portable, computing and automotive systems. An application-driven, solution-based semiconductor supplier, Fairchild provides online design tools and design centers worldwide.