Rothrock was the lead broker on the $183.5-million sale of Fujitsu's ready-to-use 200-acre semiconductor plant in Gresham Ore., which closed on Friday, just five months after marketing began. He also handled the $90-million disposition of the 93-acre former Matsushita plant in Puyallup, Wash. in 2000. In both cases, the buyer was Microchip Technology, which produces private-label chips for various companies and wanted to be able to meet demand quickly.
"There's a significant change afoot within this market," Rothrock tells GlobeSt.com, explaining that semiconductor manufacturing is more and more often being handled by these third party producers, the majority of which are currently in Asia. "So we will see more of these types of plants sold to Asian buyers entering the U.S.; our objective is to leverage our experience and get involved in some others."
Rothrock says 300 fab plants have closed since 1990, and 62 of those have closed since 2000. Most of those have been gutted, however, which is why Rothrock says that when interviewing for this latest disposition assignment, he lobbied hard for Fujitsu to leave the toolsets for making the chips in place. To do that, he said, would increase the chances of a quick sale because the buyer could be ready for chip production in months rather than years, and the effected government agencies, seeing the rapid replacement of lost jobs, would have more incentive to facilitate the transaction. It all turned out to be true.
The Fujitsu property includes 826,000-sf of buildings and 75 acres of land available for future development. In 2000, the plant received $350 million in upgrades to convert all production lines to flash memory, the memory used for cell phones and other handheld electronic devices.
Established in October 1988, it was Fujitsu's first overseas wafer fabrication facility and one of its key production bases for memory products. After the April 2000 upgrade, the economic downturn forced Fujitsu to run the plant at well below capacity. In August 2001, Fujitsu tried to get AMD to buy a 50% share of the Gresham plant, but the deal fell through.
Fujitsu announced the plant's year-end closure and its ultimate sale in November 2001, saying it reflected "the continuing slump in the worldwide semiconductor market" that has forced the company to "reorganize its worldwide manufacturing structure to eliminate surplus flash memory capacity, a process that unfortunately requires the closing of the Gresham plant" and shifting operations to a manufacturing facility in Aizu-Wakamatsu, Japan, which it co-owns with AMD.
By April 2002, Knox & Co. of Westport, Conn., an investment banking affiliate of Bank of Tokyo - Mitsubishi Ltd., a trusted advisor to Fujitsu, selected Rothrock's team to market the property. By the end of June, 10 interested users had toured the property and Fujitsu had come forward with a plan for how it wanted to purchase the facility. To help seal the deal, the City of Gresham, Multnomah County and the state put together a package of more than $17 million in tax breaks in record time, ultimately allowing Fujitsu to exercise its option for an accelerated closing.
"It really pretty much followed our script," says Rothrock, already busy evaluating two other potential fab plant disposition assignments. "And as you know, in the real estate business, that isn't always the case."
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