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ON Semi to move site 2 wafer fab at Malaysia

Posted: 30 Jun 2005 ?? ?Print Version ?Bookmark and Share

Keywords:wafer fab?

As part of its ongoing strategy to consolidate manufacturing capabilities at key sites and improve operating efficiencies, ON Semiconductor plans to transfer wafer-fab operations from its site 2 facility in Seremban, Malaysia, to its facility in Phoenix, Arizona by the end of 2006 and also announced a reduction in force.

The discontinuation of wafer-fab operations in the 20,000 square-feet of manufacturing space in the site 2 facility eliminates about 80 jobs and is expected to result in a cash restructuring charge of an estimated $1.2 million in the second quarter of 2005 for employee severance payments to be paid over the next 18 months.

Transferring the wafer production from site 2 to Phoenix should enable the company to increase its factory utilization while reducing the number of wafer production sites in its global manufacturing network. The Phoenix wafer fab serves as the company's center for the development and deployment of Lean Six Sigma methodologies and is one of the company's most efficient manufacturing facilities.

The Phoenix wafer fab, with its 60,000 square-feet of manufacturing floor space, is capable of increasing its manufacturing output without incurring a significant increase in cost or headcount. ON Semi will maintain its 281,000-square-foot assembly-and-test operation at site 1 in Seremban. Site 1 is the manufacturing facility adjacent to site 2 in Seremban and is one of the company's largest manufacturing facilities and plays a significant role in its global manufacturing strategy.

ON Semi will also continue its thin wafer and Solderable Top Metal (STM) Center of Excellence (COE) operations along with support for back grind and back metal in a portion of the site 2 facility. The company will redeploy the wafer-fab tool sets to its fab operations in Phoenix and other fab facilities within its global manufacturing network, and also is currently evaluating several potential opportunities to introduce other operations into the Site 2 facility upon the successful transition of the site's production to the company's fab in Phoenix.

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