Freescale Internal Fab Utilization Rate Drops
David Lammers, News Editor -- Semiconductor International, 4/23/2008 10:00:00 AM
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Freescale is looking for ways to boost its gross margins by bringing more production in-house. “The flow through to operating profit would be more impactful if we would build more products in our fabs,” Campbell said, adding that, “The exit of the Crolles partnership we had with ST and NXP did improve our overall utilization and did improve our gross margins.”
Freescale reported first quarter financial results Tuesday with revenues of $1.41B, slightly higher than the year-earlier first quarter sales of $1.36B. Freescale had a net loss of $245M for the quarter.
Freescale’s decision early last year to exit the Crolles alliance has resulted in payments resulting from the disposal of the Freescale-owned Crolles assets, Campbell said. While he declined to detail the amounts received from the Crolles equipment disposal, Freescale has received substantial cash from two sources: a large payment from Motorola Inc. (Schaumburg, Ill.) related to Motorola’s failure to buy wireless ICs in the amounts agreed upon when Freescale spun out of Motorola and the sale of the Crolles assets.
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| Rich Beyer, Chairman and CEO, Freescale Semiconductor Inc. |
Freescale CEO Rich Beyer, who took over a month ago from departed CEO Michel Mayer, said some products are made only at Freescale fabs, while others are made at foundries and internal fabs to ensure customers of second-source capabilities; other products are made only at foundries. If front-end silicon production is separately considered, Campbell said 19% of Freescale’s silicon is made externally, slightly higher than in previous quarters.
For its high-performance products, Freescale is skipping the 65 nm generation and moving directly to a 45 nm process co-developed at the Fishkill, N.Y., process development alliance, with production at Chartered Semiconductor Manufacturing (Singapore) and perhaps other foundries.
