Agere Systems redefines business, lays off 4,000

Allentown, PA – Agere Systems is set to redefine its business to focus on providing advanced IC solutions that access, move, and store network information. It will exit its optoelectronics business, which represented about 10% of the company’s total revenues in the June quarter of FY02. With the refocus of its business, Agere is going to reduce its work force from 11,200 to 7,200 by the end of December 2003.

“We are redefining Agere as a provider of IC solutions to target the communications and computing opportunities that present the best long-term potential,” said John Dickson, president and CEO of Agere. “As we exit our optoelectronics business, our first priority will be to ensure that we fully support our opto customers during the transition and meet our commitments to them.”

Agere will continue to deliver ICs for wireless data and storage applications, as well as multi-service networking solutions for segments such as metro, access, and enterprise.

Agere is seeking a buyer for all or parts of the optoelectronics business, but will discontinue optoelectronics operations no later than June 30, 2003. With the planned exit of the optoelectronics business, the company will discontinue or sell operations in its facilities in Dallas, TX; Alhambra and Irwindale, CA; and Matamoros, Mexico.

In addition, as a result of this exit and the previously announced sale of the analog line card business, the company no longer needs to move manufacturing operations from its Reading and Breinigsville, PA, facilities to the Allentown, PA, facility. The company intends to sell the Reading and Breinigsville properties once it discontinues those operations.

Agere will move its remaining IC wafer fabrication line from Allentown to Orlando, FL, by the end of September 2003. This move will allow the company to consolidate all of its US manufacturing operations in one facility, resulting in significant reduction in manufacturing space and costs.

Agere continues to seek a buyer for the Orlando operations and intends to sell the plant as an ongoing operation, allowing the company to continue sourcing products from this facility. If the company does not identify a buyer, it plans to operate that facility at least through September 2004.

The company’s manufacturing consolidation is consistent with its fab-lite strategy. Agere will leverage foundries for standard process technologies, continue its IC assembly and test operations in Singapore and Thailand, and maintain its wafer manufacturing joint venture with Chartered Semiconductor.

Agere’s central campus will remain in Allentown, where the company’s two sites will house R&D, operations, marketing, sales and other corporate functions.


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