Up to 500 unemployed residents will be looking for another job when Springs-based LSI Logic Corp. sells off its semiconductor manufacturing facility to Erfurt Germany-based X-FAB Semiconductor Foundries AG.
At a cash price tag of $120 million, the deal should be complete within the next month, said LSI spokesperson Kevin Brett. Both parties are waiting for antitrust clearance from the Federal government.
LSI officials made an announcement on April 11 to close its fabrication plant at 1635 Aeroplaza Dr. on August 17. At that time, X-FAB was looking for a mixed-signal (combined analog and digital) manufacturing plant to purchase that also had 0.35 micron capability – exactly what LSI was selling.
“When we say this is a win-win proposition for all, it is,” said Brett.
Between 50 and 100 of these manufacturing employees will transfer to the Gresham, Oregon, plant while the remaining employees could be considered for employment by the new tenants, said Brett.
The location at 4420 Arrowswest Dr. employs about 350 people who work as either engineers in storage components, accounts payable personnel or operate the help desk. Those employees will not be affected by the manufacturing facility’s layoffs.
“That’s going to play out in the coming days,” said Brett. “We will be working closely with X-FAB to change the … loading of the fab to reflect the demands of their customer base.”
X-FAB differs to LSI in that it provides manufacturing services for its customers. LSI is a custom semiconductor manufacturer that builds products.
LSI acquired the fabrication facility in 1998 when the industry rose. Worldwide revenue grew 19 percent in 1999 and 37 percent in 2000. But when the economy declined late last year, demand was slowing, and inventory was building, LSI officials were prompted to look at the company’s manufacturing strategy and decide.
“If 2001 were a good year, we wouldn’t have made that decision,” said Brett. “(The market) does not have soft recoveries and landings.”
X-FAB was specifically looking for a 0.35 micron, 8-inch wafer plant that could produce up to 3,000 wafers weekly.
“LSI was a motivated seller and X-FAB was a motivated buyer,” said Brett.
LSI ‘s revenues for 2000 were $2.74 billion and $1.52 billion in 1999. Revenues for the first quarter of 2000 were $615 million, $751 million in Q4, dropped to $517 million by the end of the first quarter of 2001. Net revenue dropped from $116 million in the fourth quarter of 2000 to $9.5 million three months later.
LSI is a designer and manufacturer of communications and storage semiconductors for applications that access, interconnect and store data, voice and video. Based in Milpitas, California, the company employs about 7,800 people worldwide.
New innovation to assist sales
FrontRange Solutions, formerly GoldMine Software Corp., released a template last week that complements one of its existing software programs and is specifically designed for commercial real estate agents.
The Commercial Activity Performance system can deliver real solutions to these businesses by supplying more than 350 pre-defined fields, giving real estate agents the tools of information and to share transactions with co-workers.
The new set of templates is available free of charge and must be used in conjunction with the GoldMine product that was released nearly 10 years ago. Goldmine product is used for contact management and sales-force automation and allows users to monitor and contact customers when needed. If the user needs to contact prospects periodically, the system has a systematic marketing method where reminders are given to the user regarding contact such as sending out letters, postcards and follow-up phone calls.
“We figured out what people need and worked out all the kinks,” said FrontRange spokesperson Barbara Oliverio.
The template was designed by Strategic Technology Solutions, a division of real estate corporation CB Richard Ellis and a partner with FrontRange. It took four employees and nearly one year to develop the template, said STS spokesperson Stuart Graham. For customers who don’t own the GoldMine software system, STS sells the program as well as FrontRange. The system can be downloaded by clicking on www.GoldMine.com/cap.
FrontRange Solutions, based in Colorado Springs, is the combination of three companies: GoldMine, which began in 1988 and specializes in contact management software; Bendata, which merged with GoldMine three years ago and operates as a help desk for member businesses; and Maestro Commerce, an e-commerce and e-business solutions company that merged with GoldMine last August. With the three companies operating as one, the name was changed to FrontRange Solutions at that time. The company employs about 750 people worldwide and services giants such as Disney, Shell Oil and Goodwill Industries. With more than one million users, GoldMine product recipients include ReMax, Mack Trucks, Smith Barney and Toshiba Electronic Imaging.