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Skyworks ends support for Conexant's assembly business

Posted: 06 Jun 2005 ?? ?Print Version ?Bookmark and Share

Keywords:conexant systems? assembly? test?

Semiconductor supplier Skyworks Solutions Inc. has decided it will no longer support Conexant Systems' second sourcing of assembly and test manufacturing services, effective July.

When Skyworks was formed as the wireless IC business spin-off of Alpha Industries Inc. and Conexant in 2002, Skyworks agreed to handle part of Conexant's lead frame production for three years.

Skyworks' revenue from Conexant's assembly and test business averaged $10 million per quarter last year, was $5 million last quarter. It will cease in the September quarter.

When the original agreement was signed, Conexant was expected to transition to merchant suppliers while Skyworks would grow its core business base.

"After fulfilling our manufacturing support obligation to Conexant on June 30, we can focus exclusively on building leading-edge mobile platform solutions and next-generation linear products at our Mexicali assembly and test facility," said Allan M. Kline, vice president and chief financial officer for Skyworks, in a statement. "While the Conexant lead frame business generated revenue, it was at cost per our contract. With this agreement coming to a conclusion, and our decision not to seek other merchant lead frame business, we can now accelerate our gross margin expansion."

- Spencer Chin

EE Times

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