Aviza Announces Major Restructuring
Staff -- Semiconductor International, 4/3/2008 2:45:00 PM
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The company said it would downsize its work aimed at DRAM trench capacitors, including an end to the development of large batch thermal systems for that market. It will continue to upgrade systems in the field and supply additional units to customers.
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| Jerry Cutini, CEO and President, Aviza Technology |
Cutini noted recent actions designed to reduce costs, including a workforce reduction, selling its machine shop in the UK, and a plan to sell its headquarters and move to a smaller facility in Santa Clara County, Calif. However, Cutini said the sale would mainly serve to erase an existing debt of ~$11M on the headquarters. The company also said that “volume manufacturing will no longer be performed at Aviza's current location.”
The company said it anticipates that the restructuring plan will result in annualized savings of ~$16M-$20M. Aviza will take a one-time charge in the range of $20M-$24M, primarily attributable to the write down of assets relating to non-core products, which include inventory revaluation, cancellation of purchase commitments and fixed assets. In addition, the charge covers costs “relating to an approximate 15% worldwide reduction in force of employees and contractors.”
Aviza said it currently anticipates net sales for the third quarter of its fiscal 2008 to be >$36M, with an update to that guidance expected in early May. In a Friday conference call, Cutini said the company has a break-even point of $50M-$55M per quarter, and the various cost reduction moves will serve to lower that break-even point.
"The first quarter was very challenging," Cutini said, citing pressures in the DRAM market. He said he expects sales will remain at the low end of expectations throughout 2008 “and probably into 2009.”
Aviza recently received a new order for its Omega fxP etch system from a foundry based in China for silicon trench and polysilicon etch-back processes used in manufacturing power device products. Also, it said it has received multiple follow-on orders for Omega etch systems from Anadigics Inc. (Warren, N.J.), which manufactures high-performance GaAs-based ICs used in wireless and broadband applications.
In late March, Aviza said it was advised by the Nasdaq exchange that its stock would be delisted because of the company's share price falling below $1 per share, although Aviza has 180 days to reverse the decision.
