Skyworks commences trading on the Nasdaq
Skyworks will employ approximately 3,850 people worldwide, including approximately 1,900 located at the company s semiconductor assembly, module manufacturing and test operation in Mexicali, Mexico. This facility was bought from Conexant for $150 million.
The company’s key product areas are front-end modules, RF sub-systems, cellular systems and infrastructure products. Skyworks will operate a number of manufacturing locations as follows:
* Woburn, MA – GaAs PHEMT and MESFET wafer fabrication (former Alpha facility)
* Sunnyvale, CA - GaAs HBT, PHEMT and MESFET wafer fabrication (former Alpha/NDI facility)
* Newbury Park, CA - GaAs HBT wafer fabrication (former Conexant facility)
* Adamstown, MD - RF ceramic components
* Mexicali, Mexico - High-volume semiconductor device assembly (module, lead-frame packages, ball-grid array) and testing (RF, digital, mixed-signal).
Consolidation
Skyworks also announced a set of initiatives to capitalize on the product synergies and operational efficiencies created by the combination. Key elements of this plan include consolidating manufacturing and test operations in Maryland and Massachusetts; relocating assembly operations to a Skyworks facility in Mexicali, Mexico; and eliminating excess equipment capacity. As a result, the company will reduce its workforce by approximately 8 percent to 3,850 from approximately 4,200, and also expects to lower its quarterly break-even sales level to $140 million from the $170 million level exiting 2001, excluding Mexicali assembly and test service revenues.
Skyworks will close a test and assembly facility in Haverhill, MA by the end of 2002. Some of these operations will be transferred to the company s wafer fabrication facility in Woburn, MA as well as to Skyworks high-volume assembly and test operation in Mexicali, Mexico. The company s Newport Beach, CA facilities will be consolidated into one location in Irvine. In addition, the company will close the Frederick, MD facility operated by its subsidiary Trans-Tech and fold the operation into the nearby Adamstown, MD location by the end of this year.
Business outlook for September quarter
"We expect Skyworks to generate September-ending quarterly revenues of approximately $150 million, including roughly $15 million from Mexicali assembly and test service revenues," said Aldrich. "We anticipate that our gross margin will improve significantly and expand to the 35 to 37 percent range as a result of the initiatives we are currently implementing. Excluding Mexicali assembly and test service revenues, the gross margin will be approximately 40 percent.
"At the same time, we have reduced quarterly operating expenses to a $60 million run-rate. In turn, we expect to approach operating break-even in the September quarter. Further, we anticipate continued growth and operational improvements in the December quarter, enabling us to achieve profitability by year-end," Aldrich concluded.
