Littelfuse (LFUS) announced plans to transfer its semiconductor wafer manufacturing from the United States China.
"We are committed to making this transition as seamless as possible for our customers," said Gordon Hunter, Chief Executive Officer of Littelfuse. "As part of that commitment, we will maintain continuous production capabilities for all products throughout the move."
Littlefuse says the transfer from its American plant in Texas to Wuxi will be a phased transition over the next three to four years. Upon completion of the transfer, the Irving facility will be closed.
Littelfuse will invest approximately US$16 million to build a new wafer fabrication facility in Wuxi adjacent to an existing plant the company acquired in May 2006 as part of its purchase of Concord Semiconductor. This project is expected to generate US$9-10 million of annual savings once the transfer from Irving is complete. The Irving plant closure will result in pre-tax restructuring charges of approximately US$2.5 million in the fourth quarter of 2006 and approximately US$3.5 million over the period of 2007 to 2010.
The Irving facility produces thyristor surge protection and power control devices. Littelfuse acquired the Irving operation in 2003 through its acquisition of Teccor Electronics Corporation. Approximately 180 employees in Irving will be affected by the move.
"This was a difficult decision given that Irving employees have been a significant part of our growth and success," said Hunter. "However, we believe this move is in the best interest of our company, our customers and our shareholders over the long term."