SAN FRANCISCO—Analog Devices Inc. will this quarter accelerate plans to consolidate its two remaining U.S. fabs into one facility as part of an effort to permanently reduce spending in the face of further projected revenue decline of 5 to 15 percent, the company said Wednesday (Feb. 18).
The consolidation of the. fabs, both located in Massachusetts, is expected to be completed by the end of 2009 and will result in the loss of about 184 jobs, according to ADI (Norwood, Mass.).
ADI reported revenue of $477 million for the first quarter of fiscal 2009, which closed Jan. 31. Revenue declined 28 percent from the prior quarter and 22 percent from the year-ago quarter, ADI said.
ADI posted a net income of $24.9 million for the quarter, down from $143.9 million in the previous quarter and $121.8 million in the first quarter of fiscal 2008, the company said.
For the quarter, ADI recorded restructuring charges of about $42 million in connection with facility consolidations and closures and other cost reduction efforts, the company said.
During an analyst call following the quarterly report, ADI President and CEO Jerald Fishman, said every end market and every product area experienced revenue declines, especially those related to consumer electronics.
"These are really unprecedented times," Fishman said. "Falling demand and consumer confidence continues to affect the industry worldwide."
Revenue from ADI's consumer product customers was roughly $76 million during the fiscal first quarter, a decline of 42 percent sequentially and 40 percent year-to-year, ADI said. Revenue from analog products, which accounted for 91 percent of the company's total revenue, declined 27 percent from the prior quarter and 21 percent year-over-year, ADI said.
Fishman said ADI is wrapping up the previously announced consolidation of its 6- and 8-inch fabs in Limerick, Ireland. In the U.S., plans call for ADI's Cambridge, Mass. fab to be consolidated into its existing 6-inch fab in Wilmington, Mass.
ADI said in a regulatory filing that it recorded a special charge of $22.1 million as a result of the U.S. fab consolidation, which was first disclosed by ADI last November. The company said it anticipates recording a restructuring charge, the size of which has not yet been determined, during the current quarter.
According to the regulartoy filing, ADI estimates that approximately 184 employees, including about 175 manufacturing employees, will be terminated as a result of the Cambridge fab closure.
Most of the production that takes place in the Cambridge fab, including ADI's microelectromechanical systems (MEMS), will be transferred to Wilmington, according to a company spokesperson.
ADI was long used Taiwan Semiconductor Manufacturing Co. to augment its manufacturing capacity and will continue to do so, the spokesperson said.
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