News Article

Oplink Shuts Taiwan Fab, Dumps 280 Staff

A few short months after acquiring Optical Communication Products, Oplink shuts down its InP wafer fab, ditches its UK research team, and slashes its workforce in California.

Network component vendor Oplink Communications is to shut down its InP wafer fab, the facility in Taiwan that it recently acquired in a takeover of chip maker Optical Communication Products (OCP).

Closure of the fab, which formerly belonged to Gigacomm, will see 120 employees lose their jobs as part of a wider restructuring by the parent firm, which is switching to a fabless business model.

Other measures include closing a research and development laboratory in the UK, with the loss of another 10 jobs, and slashing another 150 from the payroll at OCP s Woodland Hills, California, headquarters.

The Taiwan fab, which was founded in 2000, is expected to be closed down by March 31, 2008.

Jacob Tarn, who had been heading up OCP s Asia operations, is now involved at a senior level with the giant "Century Epitech" compound semiconductor wafer facility being built on a huge site in Shenzhen, China (see related story).

The move by Oplink has been on the cards ever since former OCP director Robert Shih resigned his position following a heated exchange with Oplink CEO Joe Liu in September.

While Liu favored the fabless approach now being implemented, Shih, who was VP of business development at Oplink, said that closing the fab would reduce the OCP division's 2008 sales by half, seriously compromising its future viability (see related story).

But with some of OCP s product lines being sold for less than the manufacturing cost of the components, Liu clearly felt that the fabless option was the only way forward.

While Oplink will retain some of OCP Asia s operations, all manufacturing will be transferred to Oplink s Zhuhai, China, site.

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