SAN JOSE, Calif.--Moving toward a fabless model, Zilog Inc. Thursday (April 22) said its board of directors has approved the much-anticipated closure of its 5-inch wafer manufacturing facility in Nampa, Idaho.
Zilog will transfer its legacy products that are currently manufactured in the Nampa facility to X-Fab Semiconductor Foundries AG's 6-inch fab in Lubbock, Texas. The move was expected (see March 26 story).
Production activity is expected to cease at the Nampa facility by the end of June 2004. In connection with this action, Zilog expects to incur total charges of approximately $14-to-$16 million, including non-cash charges of $9 million to $10 million for accelerated depreciation and fixed assets write-downs.
With this action, Zilog will complete its strategy of migrating to a full fabless model whereby its legacy products will be primarily sourced from X-Fab and its new products will be sourced from foundry partners in Asia. The San Jose-based chip pioneer also recently filed an IPO (see March 24 story).
Zilog also said sales for the first quarter of 2004 were $26.0 million, a sequential decrease of 3 percent from net sales of $26.7 million in the immediately preceding quarter. Sales increased 3 percent compared to net sales of $25.2 million in the first quarter of 2003.
On a GAAP basis, it recorded an operating loss of $0.1 million in the first quarter of 2004 compared to an operating loss $0.9 million in the prior quarter and an operating loss of $2.8 million in the first quarter a year ago.
For the three months ended March 31, 2004, Zilog reported break-even net income on a GAAP basis compared with net income of $1.0 million, or 7 cents per share, in the prior quarter and a net loss of $2.9 million, or minus 20 cents per share, for the first quarter of 2003.