ST selling 8-inch Phoenix fab to Chartered?

Last year at about this time STMicroelectronics disclosed that it would close three of its manufacturing operations over the next two to three years, which followed the decision to spin-off its flash memory business in December 2006.

The plants set to close were a 6-inch (150-mm) wafer fab in Carrollton, Texas, an 8-inch (200-mm) fab in Phoenix, Arizona and its back-end packaging and test facility in Ain Sebaa, Morocco.

Word on the street in Phoenix, according to Bill McClean, president of market research company IC Insights, is that ST’s Phoenix fab will be sold to a pure-play foundry with China-based Grace Semiconductor and Singapore-based Chartered in pursuit. Chartered is considered to be the front runner, McClean noted in an email Monday afternoon.

At the time ST announced the plant closures, it said the moves would allow it to further optimize asset utilization and enhance performance for shareholders and customers, as well as allow focus on customer satisfaction and ensure a seamless transition in the supply of products from different sites.

These closures followed the migration of most of ST’s global 6-inch wafer production to operationally less-expensive 6-inch fabs in Singapore or to finer-geometry 8-inch facilities around the world, and as a result of this earlier program, most of ST’s 6-inch fabs in Europe were phased out or converted to 8-inch manufacturing and ST realized savings of more than $150 million per year, the company also said last year.

ST described its wafer production plant in Phoenix as a “relatively small” 8-inch facility that uses mature technology, and given its size and technology, the fab would have required substantial capital expenditure to be upgraded to the state-of-the-art technology necessary to continue efficient operations over the long term. Capacity from this plant was to be shifted to other ST plants or subcontractors in Asia and Europe.

Update:  ST reiterated that it is in "advanced negotiations to sell the facility as an ongoing
business."

–Ann Steffora Mutschler, Senior Editor