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LSI to Sell Gresham Fab to ON Semiconductor for $105 Million
MILPITAS, Calif. -- April 6, 2006 -- LSI Logic Corporation (NYSE: LSI) today announced that it has signed a definitive agreement to sell its Gresham, Oregon semiconductor manufacturing facility to ON Semiconductor Corporation's (Nasdaq: ONNN) primary operating subsidiary, Semiconductor Components Industries, LLC, for approximately $105 million in cash. The agreement calls for ON Semiconductor's subsidiary to purchase the 83 acre wafer fabrication facility campus, consisting of multiple buildings with approximately 500,000 square feet of floor space, including an estimated 98,000 square feet of cleanroom space. The assets to be purchased also include a 200 millimeter-capable toolset and equipment that can produce 18,000 8-inch wafers per month. Under the terms of the agreement, ON Semiconductor's subsidiary will offer employment to substantially all of the LSI manufacturing employees based at the Gresham site, with the remaining non-manufacturing workforce expected to continue their employment with LSI. ON Semiconductor's subsidiary will also enter into additional agreements with LSI, including a multi-year wafer supply and test agreement, intellectual property license agreement, transition services agreement and a facilities use agreement. "We are very pleased to have secured a buyer interested in both the advanced manufacturing capabilities and the experienced workforce associated with our Gresham facility," said Abhi Talwalkar, president and chief executive officer, LSI Logic. "As a result of today's agreement, we anticipate providing uninterrupted service to customers while enhancing LSI competitiveness as we continue to execute our fabless manufacturing strategy." In September, 2005, LSI announced plans to adopt a fabless manufacturing strategy to better serve its global customer base, reduce production costs, and adopt leading-edge process technologies. The company also announced it would seek to expand its working relationships with major foundry partners and adopt a roadmap leading to production of advanced semiconductors utilizing 65-nanometer and below process technology on 300-mm, or 12-inch wafers. Associated with adoption of the new strategy, the company announced its intention to sell its world-class 8-inch wafer fabrication facility in Gresham, Oregon. The securing of a suitable buyer and closing of the transaction had been previously expected to take as long as one year from the date of the September 2005 announcement. LSI now however anticipates completing this transaction within the next 45 days. LSI does not expect to record a loss associated with the sale of the Gresham manufacturing facility. The transaction is subject to the satisfaction of customary closing conditions and regulatory approvals including those required by the Hart-Scott-Rodino Antitrust Improvements Act. About LSI Logic LSI Logic Corporation is a leading provider of silicon-to-system solutions that are used at the core of products that create, store and consume digital information. LSI offers a broad portfolio of capabilities including custom and standard product ICs, host bus and RAID adapters, storage area network solutions and software applications. LSI products enable leading technology companies in the Storage and Consumer markets to deliver some of the most advanced and well-known electronic systems in the market today. More information is available at www.lsi.com. About ON Semiconductor With its global logistics network and strong portfolio of power semiconductor devices, ON Semiconductor is a preferred supplier of power solutions to engineers, purchasing professionals, distributors and contract manufacturers in the computer, cell phone, portable devices, automotive and industrial markets. For more information, please visit ON Semiconductor's website at http://www.onsemi.com/ .
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