ON Semi confirms 200 layoffs, fab closure

ON Semiconductor has confirmed plans to cut about 200 global employees and close a 5-inch fab as it merges in AMI Semiconductor.

By Suzanne Deffree, Managing Editor, News -- Electronic News, 3/19/2008

ON Semiconductor Corp has confirmed plans to cut about 200 global employees and close a fab as it merges in AMI Semiconductor (AMIS).

The $613 million merger of the two analog and power companies was official Monday, with Phoenix-based ON suggesting at the time that layoffs were on the way.

“The acquisition brings together ON Semiconductor’s leading standard products, operational excellence and manufacturing infrastructure with AMIS’ substantial custom product portfolio. … Furthermore, we expect to achieve significant operating and manufacturing cost savings. Starting this week, the company will begin executing the planned operational integration of the two companies to ensure a smooth transition and create immediate value for our customers, partners, and investors,” said Keith Jackson, ON president and CEO, in a carefully worded statement Monday.

Today, Electronic News confirmed that the merged company will see approximately 60 employees laid off in the next 30 days from AMIS’ Pocatello, Idaho, location. That will be followed by the closure of AMIS’ 5-inch Fab 9 in the next 18 to 24 months. In doing so, ON will eliminate approximately 150 jobs. ON said the fab is being closed as a matter of technology progression and that its product will be moved to ON’s 8-inch fab and to production in Europe.

“[The layoffs] are primarily where we have two people doing the same job and we need to get them down to one. Executives, finance, any of the areas where there would be duplication,” Tamera Drake, an ON spokeswoman, told Electronic News.

“Less than 200 employees will be eliminated from the combined companies worldwide within the first 90 days, including the first 60,” she said.

Drake said that the total layoffs will be from the combined company and will include layoffs on the ON side, as well as at AMIS locations.

ON first announced plans to buy AMIS in December 2007. Combined, the new company has cumulative last 12 months revenues of approximately $2.2 billion.