UPDATE: Atmel sells Texas fab to Maxim, continues fab-lite push

May 2, 2007 – Atmel Corp. is continuing to carve out manufacturing operations with the latest sale of its Irving, TX facility to Maxim Integrated Products Inc. for $38 million in cash.

The 200mm facility on 39 acres, purchased from Hitachi several years ago but put back on the market in early 2005, has capacity for 20,000 wafer starts/month and can be expanded up to 30,000 wafers/month, with capabilities down to 0.18-micron process technologies. The site’s ~60,000 sq. ft. of cleanroom space also can be expanded up to 100,000 sq. ft.

“This facility puts us in an excellent position for future capacity requirements,” said Vijay Ullal, group president at Maxim, in a statement. “The scale and construction of this facility will enable Maxim to bring on line capacity down to the 0.18-micron node with low cost and short cycle time with high yields.”

The Dallas Business Journal reports that the Texas Enterprise Fund, a development fund launched in 2003 to provide economic incentives for local businesses, will give Maxim $5 million to reopen the Irving facility, in return for a promise to hire 1000 workers over the next seven years. Maxim got a similar $1.5 million grant from the Texas Enterprise Fund in 2003 to open a semiconductor facility in San Antonio, the paper notes.

Late last year Atmel Corp. put the finishing touches on its strategic transition to a “fab-lite” business model, selling off two more fabs (North Tyneside, UK, and Heilbronn, Germany) and significantly reducing manufacturing costs and laying off nearly half its workforce. After recording a one-time charge in excess of $200 million in 4Q06, Atmel expects cost savings of $70-$80 million next year and $80-$95 million annually starting in 2008. The company already had sold manufacturing sites in Grenoble and Nantes, France, involving image sensor and aerospace semiconductors, and works with Malaysian foundry 1st Silicon for 0.18-0.13 micron flash production.

“The sale of our Irving facility is another positive step in our plans to consolidate Atmel’s manufacturing operations, focus resources on our core technologies and increase shareholder value,” said Steve Laub, Atmel president/CEO in a statement, hinting that there will be “additional actions throughout 2007” to improve the company’s financial position.


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