Agere focuses on advanced IC solutions, plans to consolidate manufacturing in Orlando and lay off 4,000 of its 11,200 employees

August 14, 2002

3 Min Read

ALLENTOWN, Pa. -- Agere Systems (NYSE: AGR.A, AGR.B) today announced that it would redefine its business to focus on providing advanced integrated circuit solutions that access, move and store network information. The company will exit its optoelectronics business, which represented about 10 percent of the company's total revenues in the June quarter of fiscal 2002. Agere is seeking a buyer for all or parts of this business, but will discontinue optoelectronics operations no later than June 30, 2003. "We are redefining Agere as a premier provider of integrated circuit solutions to target the communications and computing opportunities that present the best long-term potential," said John Dickson, president and CEO, Agere. "As we exit our optoelectronics business, our first priority will be to ensure that we fully support our opto customers during the transition and meet our commitments to them." Agere will continue to deliver advanced integrated circuits for wireless data and storage applications, as well as multi-service networking solutions for segments such as metro, access and enterprise. "With this strategy, Agere will be well-positioned to build on its existing leadership and address new opportunities as market conditions improve," said Dickson. "Going forward, we are pleased that our customer base will remain essentially unchanged, as we continue to provide IC solutions to these and other customers in the network equipment, computing and wireless markets." With the planned exit of the optoelectronics business, the company will discontinue or sell operations in its facilities in Dallas, Texas; Alhambra and Irwindale, Calif.; and Matamoros, Mexico. In addition, as a result of this exit and the previously announced sale of the analog line card business, the company no longer needs to move manufacturing operations from its Reading and Breinigsville, Pa., facilities to the Allentown, Pa., facility. As announced in January this year, the company intends to sell the Reading and Breinigsville properties once it discontinues those operations. The company will move its remaining IC wafer fabrication line in Allentown to Orlando, Fla., by the end of September 2003. This move will allow the company to consolidate all of its U.S. manufacturing operations in one facility, resulting in significant reduction in manufacturing space and costs. Agere continues to seek a buyer for the Orlando operations and intends to sell the plant as an ongoing operation, allowing the company to continue sourcing products from this facility. If the company does not identify a buyer, it plans to operate that facility at least through September 2004. The company's manufacturing consolidation is consistent with its "fab-lite" strategy. Agere will leverage foundries for standard process technologies, continue its IC assembly and test operations in Singapore and Thailand, and maintain its wafer manufacturing joint venture with Chartered Semiconductor. Agere's central campus will remain in Allentown, where the company's two sites will house research and development, operations, marketing, sales and other corporate functions. The continued streamlining of the company's business, including the plans to exit the optoelectronics business and consolidate manufacturing operations in Orlando, will reduce Agere's active workforce from approximately 11,200 currently to about 7,200 by the end of December 2003. Agere Systems

Subscribe and receive the latest news from the industry.
Join 62,000+ members. Yes it's completely free.

You May Also Like