SAN JOSE, Calif. -- Zarlink Semiconductor Inc. has taken proactive measures to protect its foundry base. This is following MHS Electronics UK Ltd.'s advice that it is likely to cease wafer shipments to Zarlink from the analog foundry in Swindon, U.K.
Seeking to cut costs, Canada's Zarlink last year sold its analog foundry operations in Swindon, U.K. to MHS Electronics, a subsidiary of MHS Industries Group, for a mere 1 euro or $1.50. At the time, MHS would provide foundry services for Zarlink.
But late last year, MHS Electronics, a privately held electronic component and systems maker near Nantes, France, announced the opening of insolvency proceedings at the Commercial Court of Nantes on Dec. 5, 2008. MHS Electronics said the Commercial Court of Nantes decided on Dec. 10, 2008, to put the company into receivership for a six-month observation period so as to consider a recovery plan.
MHS Electronics advised that it will likely be ceasing foundry services to Zarlink from its Swindon analog foundry. As part of a managed transition, likely complete by mid-2009, Zarlink will receive necessary wafer inventory from MHS Electronics to facilitate transfer of production to alternative foundries.
Zarlink has agreements in place with its other foundry partners to provide continuity of wafer supply, and is working with MHS Electronics to transfer processes where appropriate.
Zarlink did not elaborate, however.