6/30/2003 - Cirrus Logic, Inc. (Nasdaq: CRUS) announced it has agreed to sell its semiconductor test operations assets in Austin, Texas to ChipPAC, Inc. (Nasdaq: CHPC), a Fremont, California-based provider of semiconductor packaging design, assembly, test and distribution services. Cirrus will transfer assets including analog and mixed-signal testers, handlers and wafer probers in exchange for cash and services. The transaction is expected to close by June 30, 2003.
In addition to the transfer of assets, Cirrus Logic and ChipPAC have entered into a long-term strategic alliance, under which ChipPAC will provide package development, wafer probe, assembly, final test and distribution services to Cirrus Logic. With more than 5000 employees worldwide, ChipPAC offers QS 9000 certified facilities strategically located in Korea, China and Malaysia, as well as advanced design and characterization services centers in California, Arizona and Korea.
“Our agreement with ChipPAC allows us to create a more efficient supply chain that will enable us to be more responsive to our customers and to the large growth opportunities in the digital entertainment marketplace. Following an approximate six-month transition period, we expect on-going cost savings of $1.5 - $2 million per quarter,” said David French, Chief Executive Officer and President of Cirrus Logic. “ChipPAC’s broad product portfolio, dominance in China and its analog mixed-signal test expertise gives us confidence in our decision to engage in this long-term relationship. In addition, ChipPAC has a proven track record of successfully acquiring and transferring equipment from its customers to ensure a seamless transition. This transaction will impact approximately 120 Cirrus Logic employees over a four-month period.”
Dennis McKenna, Chairman and Chief Executive Officer of ChipPAC, Inc., stated, “Cirrus Logic is a global leader and we are pleased to be aligned with them. We expect this transaction will add $14 million to $18 million in additional revenue annually. Cirrus Logic represents a growing trend among semiconductor manufacturers wanting to outsource services, such as wafer probe and final test, closer to their overall supply chain and end-markets. In this case, ChipPAC will transfer these assets to our China facility, which aligns well to the growth of wafer fabs, card and end product manufacturing. Equally important, this agreement positions us even better to benefit from the high growth of IC’s in the home entertainment end market, including DVDs and game machines, given Cirrus Logic’s customer base and strength.”
About Cirrus Logic
Cirrus Logic is a premier supplier of high-performance analog, mixed-signal, and digital processing solutions for consumer entertainment electronics, automotive entertainment and industrial product applications. Building on its global market leadership in audio ICs and its rich mixed-signal patent portfolio, Cirrus Logic targets audio, video and precision mixed-signal applications in these growing markets. The company operates from headquarters in Austin, Texas, with offices in California, Colorado, Europe, Japan and Asia.
About ChipPAC, Inc.
ChipPAC is a full-portfolio provider of semiconductor packaging design, assembly, test and distribution services. The company combines a history of innovation and service with more than a decade of experience satisfying some of the largest customers in the industry. With advanced process technology capabilities and a global manufacturing presence spanning Korea, China, Malaysia and the United States, ChipPAC has a reputation for providing dependable, high quality packaging solutions. For more information, visit the company’s Web site at www.chippac.com.
Cirrus and Cirrus Logic are trademarks of Cirrus Logic, Inc.
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