Fairchild Semiconductor will close its wafer fabrication plant in Mountaintop, PA leading to a closure of the site, and one of its wafer fabs in Bucheon, South Korea. These actions are consistent with the company’s ongoing cost reduction strategy, and the need to align manufacturing capacity with end demand. Most products currently made at the Mountaintop, PA site will be transferred to other internal sites. A small office will be maintained for technology and product line functions in the Mountaintop area.

The South Korea site will close its four-inch line and transfer associated manufacturing to its five and six-inch wafer fabs. Fairchild will work closely with customers during the process to ensure a seamless transition. The company anticipates the consolidation of the South Korea fabrication processes and the closure of the Mountaintop facility will be completed by June, 2010. Fairchild expects to incur approximately $18 to $23 million of cash charges, primarily for severance and other costs associated with transfer activities beginning in the second quarter.

The company will also take additional non-cash charges of approximately $25 to $30 million for impairments and accelerated depreciation over the course of the next six quarters. In addition, roughly 200 jobs will be eliminated at the Mountaintop site. Once completed, the company expects to realize annual savings ranging from $20 to $25 million as a result of these closures.