Mar 29, 2002 Ottawa, Ontario
Zarlink Semiconductor Inc. has found a buyer for its wafer fabrication facility in Plymouth, England. The Ottawa, Ontario-based company today said X-FAB Semiconductor Foundries AG of Erfurt, Germany, would acquire the facility for $30 million.
X-Fab will pay $12 million in cash after the deal closes, and then a secured note of $18 million repayable over three years. In addition to the Plymouth fab, X-Fab acquires the IP associated with it.
Earlier in the year, Zarlink said it intended to divest itself of the fab as the company moves toward a fabless semiconductor model. Zarlink is the name of Mitel Corp.�s semiconductor operation after Mitel changed its business focus; the Plymouth plant was acquired by Mitel four years ago from Plessey Semiconductors Ltd.
Under the companies agreement, Zarlink has a guaranteed supply of its products manufactured at the plant for the next five years. This consists mostly of telecommunications and medical chips designed by Zarlink, although the facility does also produce chips for other global companies.
"This is another important milestone in building a fabless semiconductor design company," said Patrick J. Brockett, Zarlink�s president and CEO. "Coupled with last month's sale of our foundry in Bromont, Quebec, 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 houses two CMOS wafer fabrication lines for digital and mixed-signal communications and medical semiconductors. It recently launched a new ultra low-power Analog Non Volatile� 0.35-micron CMOS process optimized for low voltage and low power applications.
Zarlink said it would transfer about 175 wafer production employees to X-Fab as part of the sale. The remaining on-site staff, consisting of design engineers, product developers and test engineers, will continue to be employed by Zarlink.
The company also said it expects to record no gain or loss in its fiscal fourth quarter from the sale.
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