In a major shift from a fab-lite to a fabless manufacturing model, LSI Logic Corp. plans to sell its 8-inch Gresham, Ore., manufacturing facility

The Milpitas, Calif.-based company’s new strategy will expand relationships with major foundry partners and adopt a roadmap leading to the production of advanced semiconductors utilizing 65nm and below process technology on 300mm or 12-inch wafers, the company explained.

During the transition to the fabless model, LSI Logic said it would continue to meet the production needs of its worldwide customers through the use of its Gresham factory and its foundry suppliers.

LSI Logic noted it would work with Oregon’s Multnomah County and the city of Gresham during the sale of the Gresham campus, which has served as LSI's primary semiconductor plant.

“Leading-edge foundries have consistently demonstrated that they have the capability to manufacture the advanced solutions required by our standard-cell ASIC, Platform ASIC and standard product customers,” said Abhi Talwalkar, LSI Logic president and CEO, in a statement.

“Our customers are demanding technology leadership from LSI Logic in the drive toward 65nm process technologies and lower, and that is exactly the course we are going to follow,” he continued.

“The adoption of a fabless model, the expansion of our foundry partner relationships, and the pursuit of a 65nm process technology roadmap is the right manufacturing strategy for LSI Logic to better serve its customer base, reduce manufacturing costs to bolster its competitiveness and to enhance value for its shareholders,” Talwalkar added.

LSI Logic presently employs a “fab-lite” global manufacturing strategy, serving the manufacturing needs of its customer base at its Gresham campus and at its foundry partners, TSMC, UMC, SMIC and ROHM Co Ltd.

When the transition to a fabless model is completed, LSI Logic said it would meet manufacturing requirements of customers exclusively through engagements with its major foundry partners.

The company estimates it will record restructuring and other charges of approximately $75 million to $110 million in Q3 for fixed asset write-downs, severance and other expenses associated with the planned sale of the Gresham facility. The company anticipates incurring related restructuring charges of less than $3 million per quarter in Q4 and the first two quarters of 2006.

By: DocMemory
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