Unloading Gresham fab a no-brainer, says LSI Logic CEO

NEW YORK, N.Y. — LSI Logic president and chief executive Abhi Talwalkar told analysts Wednesday (Sept. 14) the decision to sell its 8-in. fab in Gresham, Ore., was a necessary one to execute the company's transition to a fabless manufacturing strategy.

Speaking at a packed analysts' meeting here, Talwalkar said that interest in the world-class fab, which LSI Logic (Milpitas, Calif.) announced Tuesday it would seek to sell, is strong, though declined to divulge details. He added the company was seeking to sell the fab within the next year.

Under former chief executive Wilf Corrigan, LSI Logic was considered by many a manufacturing company. But global market changes dictate the company shed that label, according to Talwalkar.

"There are always risks and shifts in strategy," Talwalkar said. "I imagine Wilf and others had gut-wrenching discussions about what to do with the fabs. The economics are unavoidable. A lot of products come from foundries."

Talwalkar and other company officials reiterated the fabless strategy would help the company move to using advanced 90-nm and 65-nm and below process technology on larger wafers, to help address key markets such as storage and consumer products.

In moving to a fabless model, Talwalkar indicated that LSI would seek to consolidate its foundry supplier base, particularly in ASICs where the company has in recent years lost traction due to a changing marketplace.

"We may have to narrow our base of foundries for ASICs," Talwalkar said, not indicating which partners the company would ultimately choose to remain allied with.