EAST FISHKILL, N.Y. Is IBM Corp. looking to sell a wafer fab as part of a major effort to cut costs?
Hit hard by the current downturn in the computer and electronics markets, IBM is reportedly seeking to sell its 200-mm (8-inch) wafer fab in Burlington, Vt., and plans to reduce its overall headcount at the site by 1,500 workers, according to a report from the Boston Globe Tuesday (May 14). The Burlington plant was the world's first commercial 200-mm wafer fab.
The report cites the investment banking firm of Fechtor, Detwiler & Co. in Boston as saying that several chip makers are looking to buy IBM's facility, including Germany's Infineon Technologies AG, South Korea's Samsung Electronics Co. Ltd., and Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC).
Officials from IBM's Microelectronics Group, Infineon, Samsung, or TSMC could not be reached for comment.
The new report comes amid a difficult period for IBM. Last month, the Armonk, N.Y.-based computer giant reported a first-quarter profit of $1.19 billion, a 32 percent decrease from $1.75 billion in the year-earlier period. IBM's first-quarter revenues totaled $18.6 billion, a decrease of 12 percent compared with the first quarter of 2001.
The company blamed the results on slumping computer sales as well as declining technology revenues, which include hard disk drives and semiconductors.
IBM is taking some drastic measures to reduce costs. For example, the company recently announced plans to set up a disk-drive joint venture with Japan's Hitachi Ltd. And last week, reports surfaced that IBM plans to cut from 2.5-to-3 percent of its workforce, or between 7,950 and 9,540 employees.
Now, the company appears to be making cuts in its prized semiconductor operations, reportedly including its fab in Burlington.
IBM is by no means backing away from the semiconductor business. The company will shortly begin making chips in its advanced, 300-mm wafer fab in East Fishkill. In 2000, IBM announced it would invest $2.5 billion in the 300-mm fab as part of a $5 billion capital spending plan (see Oct. 10, 2000 story ).
IBM also has a 300-mm joint fab venture in Japan with Seiko Epson Corp. It also is building MRAMs in Altis Semiconductor, a joint venture between IBM and Infineon.
But IBM is also not afraid to sell its non-strategic fab assets. In 2000, the company sold its former joint-venture fab with Cirrus Logic Inc. to Philips Semiconductors, which plans to invest $100 million in the MiCRUS chip-processing facility to increase itsproduction of advanced BiCMOS products (see June 21, 2000 story ).