PLYMOUTH, England -- Canada's Zarlink Semiconductor Inc. today announced it has found a buyer for its wafer fab here. X-Fab Semiconductor Foundries AG of Erfurt, Germany, has agreed to buy the facility for $30 million--$12 million in cash on closing of the transaction and $18 million in secured notes payable over three years, the two companies said.
Zarlink--formerly Mitel Corp.'s semiconductor operation--announced plans to divest itself of the U.K. fab earlier this year as part of cost cuts and a move toward a fabless semiconductor model (see Feb. 7 story). The Plymouth fabrication plant was once part of Plessey Semiconductors Ltd., which was acquired by Mitel four years ago.
"This is another important milestone in building a fabless semiconductor design company," said Patrick J. Brockett, president and CEO of Ottawa-based Zarlink. "Coupled with last month's sale of our foundry in Bromont, Quebec see Jan. 21 story, we are increasingly focusing our engineering, management, and financial resources on speeding the introduction of new communications and ultra low-power medical integrated circuits."
The Plymouth facility comprises two frontend fab lines--one being for 8-inch wafers and the other for 6-inch substrates. The facility produces CMOS digital and mixed-signal chip designs primarily for communications and medical applications.
The plant recently launched what Zarlink says is a new ultra-low power "Analog Non Volatile" 0.35-micron CMOS process, which is optimized for low voltage and low power applications. The two frontend production lines have a combined capacity of 1,250 eight-inch equivalent wafer starts per week, said X-Fab.
X-Fab will gain ownership of the intellectual property (IP) in the Plymouth plant as part of the acquisition of the facility. The German foundry company also said it plans to its mixed-signal/high-voltage BiCMOS and special processes to 0.35-micron technology on 8-inch wafer fab line.
As a result of the acquisition, X-Fab said it will expand its worldwide capacity 18%. The foundry company also operates fabs in Erfurt and Lubbock, Tex. The company said it currently has a combined capacity of more than 8,000 eight-inch equivalent wafers per week.
In conjunction with the planned sale, the two companies have signed a five-year agreement to ensure that Zarlink products are manufactured at the Plymouth fab. The company said the majority of the facility's output consists of telecommunications and medical chips designed by Zarlink. The rest of the plant's output is sold to other global companies.
About 175 Zarlink employees working in wafer production will be transferred to X-Fab as part of the sale. Zarlink said it will continue to employ the remaining on-site staff of design engineers, product developers, and test engineers.
Zarlink said it expects to record no gain or loss on this sale in the fourth quarter of its fiscal 2002 period.