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Cypress to let go of Texas fab

Posted: 21 Dec 2007 ?? ?Print Version ?Bookmark and Share

Keywords:Texas fab? foundry service? manufacturing?

Cypress Semiconductor Corp. has announced plans to transfer production at its Fab 2 manufacturing facility in Round Rock, Texas by late 2008, to its more cost-competitive Minnesota fab and outside foundries.

Shahin Sharifzadeh, executive VP of manufacturing at Cypress, said that the company is looking at a number of options that include selling the Texas fab operation or simply divesting its assets. "We have a long transition timeline and anticipate a smooth product manufacturing transition with no customer impact," Sharifzadeh said.

"Fab 2 is a very efficient and well-run operation but the factory is small and runs older 0.35? process technologies," said Sharifzadeh. "All of our newer products are being designed on more advanced process technologies, so it is simply more cost effective for us to shift manufacturing elsewhere than to retool Fab 2."

Sharifzadeh added that in addition to the company's Minnesota fab, there is ample cost competitive foundry capacity in Asia enabling Cypress to achieve lower manufacturing costs.

Cypress opened Fab 2 in 1987 with 68 employees and 18,000ft? of cleanroom space. The plant was expanded to 32,000? in 1999 and currently employs 245 people. In recent years the site has been building legacy USB, programmable logic, timing and communications devices on six-inch wafers. Sharifzadeh said the plant would be suited for a company that is looking to make custom analog parts or wants a site for U.S.-based products.

The company's decision to exit Fab 2 is consistent with its Flexible Manufacturing initiative, which combines capacity from leading foundries with output from Cypress's internal fabs. The initiative allows Cypress to meet rapid swings in customer demand without the burden of high fixed costs, a capability that is particularly important in high-volume consumer markets that the company serves with its leading programmable product portfolio.

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