Power ICs specialist International Rectifier (IR) has become the latest potential saviour of the analogue and mixed-signal foundry in Newport, Wales, following Monday's announcement that it is to buy the in-administration facility for $81m.
The fab, currently European Semiconductor Manufacturing (ESM) and before that Newport Wafer-Fab (NWL), called in administrators in January following a collapse in customer demand.
Alex Lidow, IR's CEO, said, "The acquisition represents excellent value, and positions IR to meet the demand for our fast-growing proprietary products over the next several years, as well as our goal of 30% overall revenue growth in fiscal 2003."
ESM was created through a £100m ($142.4m) management buy-out in August 1999 with backers including venture capital group Apax Partners and German chip manufacturer Dialog Semiconductor. This deal took the then NWL out of an eight-month administration.
Dialog agreed a £200m supply deal with ESM as recently as December 2001, but this was not enough to prevent the plant being forced to call in the administrators again.
There are 8000 sqm of capacity at Newport (pictured left). Its Fab 3 can handle geometries down to 0.25µm. Lidow said IR will invest in the site.
"We expect to invest up to $125m more over the next five years in line with growth needs and market conditions to bring this facility to full capacity," he said. "We expect the fab will be able to generate $750m of revenue annually."
The latest administration saw jobs at ESM cut by 235 from 527 to 292. It now looks likely that some of those staff made redundant will be rehired.
IR has another 9000sqm production facility nearby at Penllergaer, Swansea. It specialises in power modules and power motion control products and employs 100 staff.
Rhodri Morgan, the Welsh First Minister, spoke of his relief at IR's decision: "We are pleased that once again they have chosen Wales as the location for this key strategic phase of their ongoing expansion.
"The new owner of this advanced semiconductor facility in Newport has a proven track record of growth, and I am delighted by their decision.
"It further demonstrates their long-term commitment to the Welsh economy and is great news for ESM's staff in Newport."