A small office will be maintained for the technology and product line functions in Mountaintop area. The South Korea facility will close up its four-inch line and transfer related manufacturing to its five and six-inch wafer fabs. The company will work intimately with the 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,” stated Mark Thompson, president, chairman and chief executive officer of Fairchild. “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.”
Fairchild expects the consolidation of South Korea fabrication processes and closure of Mountaintop facility will be finished by June, 2010. The company anticipates incurring about $18 to $23 million of cash charges, mainly for severance and other costs related with transfer activities starting in the second quarter of 2009. The company will also take extra non-cash charges of about $25 to $30 million for impairments and accelerated depreciation over the course of the next six quarters. Additionally, about 200 jobs will be abolished at the Mountaintop site. Once finished, the company anticipates realizing annual savings ranging from $20 to $25 million as a result of these closures.
