News & Events
Elantec Announces Strategic Wafer Foundry Agreement
MILPITAS, CALIFORNIA, October 25, 2001 - Elantec Semiconductor, Inc. (NASDAQ: ELNT), a leader in high-performance analog ICs, today announced it has signed a letter of intent to enter into a strategic wafer foundry agreement with a major semiconductor manufacturer. The agreement will establish the foundry partner as Elantec's primary bipolar foundry for its future bipolar wafer process requirements, allowing Elantec access to leading edge Bipolar, BiCMOS, and potentially other advanced analog process technologies. Elantec will continue to manufacture existing bipolar product families at its bipolar wafer fabrication facility in Milpitas, California and its other existing bipolar foundry.
Rich Beyer, President and Chief Executive Officer at Elantec stated, "The foundry and bipolar development relationship between our new partner and Elantec represents a very exciting step for our Company. Elantec has significant experience, presence and success in a wide range of products and applications that are best served with analog bipolar technologies. This partnership promises to enable us to expand our efforts in these areas for many years to come."
As a result of the decision to outsource its future advanced bipolar wafer process development and related production requirements, the Company will incur a charge of approximately $15.4 million. The majority of these costs will be incurred in Elantec's fourth quarter of fiscal 2001 and the remainder in the first quarter of fiscal 2002. The major portion of these costs are attributable to the retirement and impairment of existing bipolar process development tools and six-inch wafer fabrication tools, which will no longer be required by the Company as a result of the outsourcing decision. The remaining portion of the charge relates to severance expenses and obsolete inventory.
The Company will comment further on this partnership in its previously announced Fourth Quarter Fiscal Year 2001 Conference Call being held today at 1:30 p.m. Pacific Time.
Elantec designs, manufactures and markets high performance analog integrated circuits primarily for the video, optical storage, communications, and power management markets. The Company targets high growth commercial markets in which advances in digital integrated circuit technology are driving increasing demand for high speed, high performance and low power consumption analog circuits.
Certain matters discussed in this press release pertaining to our relationship with our foundry partner and the manufacture of our products are forward-looking statements that involve risks and uncertainties. These risks and uncertainties include our ability to successfully conclude a definitive agreement with this foundry partner, to ramp up production at our foundry partner in an efficient and timely manner, fluctuations in manufacturing yield, available foundry capacity, product introductions by the Company's competitors, market conditions, competitive pricing pressures, changes in the mix or markets in which products are sold, availability and cost of raw materials, and other risks discussed in the Company's most recent forms 10-Q and 10-K, filed with the Securities and Exchange Commission. The Company's actual results could differ materially from those discussed herein.
