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Components | October 17, 2011

ON Semi to close Aizu facility

ON Semiconductor plans to close its wafer manufacturing facility located in Aizu, Japan, by the end of June 2012.
This closure is part of the company’s overall drive for operational efficiencies and is in line with an ongoing strategy aimed at migrating in-house production to large, high volume fabs, and investing in more advanced wafer technologies.

The closure of the Aizu facility is expected to result in the elimination of approximately 197 full time and 94 contract jobs currently held by workers at the Aizu site. All Aizu products are expected to be fully transferred for production by early 2012. ON Semiconductor teams will begin working closely with customers whose products are produced at the Aizu facility to better enable a smooth transition and uninterrupted product delivery.

“The closure of our Aizu facility is another step forward in the company’s transformation of its manufacturing network,” said John Nelson, executive vice president and chief operating officer for ON Semiconductor. “The majority of Aizu’s production will be transferred to company-owned fabs and most of the products currently produced at the 6-inch Aizu fab will be transferred to 8-inch wafer production. Among the expected benefits for both the company and our customers will be higher yields and lower defect rates resulting from the use of newer 8-inch production equipment.”

Financially, the Aizu closure is expected to result in total cash charges of approximately $20 to $25 million beginning in fourth quarter of 2011. Once the Aizu facility has closed, the company expects to save a total of approximately $8 million per quarter, with the full benefits seen beginning in the fourth quarter of 2012. ON Semiconductor will provide additional details regarding the anticipated financial impact of the closure of its Aizu facility during its third quarter financial earnings call, to be held the first week of November.
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