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LSI Logic Selling Plant, Outsourcing Work

GRESHAM, OR- LSI Logic of Milpitas, CA, intends to sell its four-building, 500,000-sf manufacturing facility on 300 acres here as part of its transition to a "fabless" operating model, which means it will outsource the fabrication of all its products. The company hopes to find a buyer that will continue to operate the facility so it can be a customer.

By Brian K. Miller | Updated on September 14, 2005

GRESHAM, OR-LSI Logic of Milpitas, CA is looking to sell its fabrication plant here as part of its transition to newer technology and a “fabless” operating model, which means it will no longer fabricate any of its own product. A company source tells GlobeSt.com it will continue to operate the 300-plus-acre, 500,000-sf facility in the near term and hopes to find a buyer that will continue to operate the facility so it can be a customer.

LSI designs high-performance semiconductors that access, interconnect and store data, voice and video. The Gresham plant, which opened in 1998, is LSI’s only US semiconductor manufacturing facility. Much of the company’s manufacturing is already being done overseas through existing foundry partners (UMC, SMIC and ROHM Co Ltd.) in Taiwan, Japan, China and Malaysia.

The LSI source tells GlobeSt.com that while it still needs the type of product produced at the Gresham Plant – .18 micron wafers – enough of its customers are demanding it is pursue 65-nanometer process technology that it will no longer be profitable to operate the facility. It could, however, be profitable for a third-party manufacturer that still has multiple customers in need of .18-micron wafer. The LSI source says that is a likely scenario because 20% of all specialty chips and 34% of all integrated circuits still utilize the technology. In a news conference in New York on Tuesday afternoon, LSI President Abhi Talwalkar says the sale of the plant and the focus on “is the right manufacturing strategy for LSI Logic to better serve its customer base, reduce manufacturing costs to bolster its competitiveness and to enhance value for its shareholders.”

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