Atmel sells fabs

Yes, that's the exit statement. No mention of what products will be impacted ?

Here is the entry statement, 6yrs ago :

Shows these stats, (at end Sept 2000) Atmel's current fab line-up Wafer size Processes Area (sq m) Status Colorado Springs, US 6in 0.5 micro m 41,805 Running Heilbronn, Germany 6in 0.5 micro m ~10,000 Running Nantes, France 6in 0.5 micro m ~10,000 Running Rousset, France 8in 0.35 36,045 Running, but 0.25 micro m, not complete 0.18 micro m Irving, Texas, US 8in 0.18 micro m 60,385 Running from Q1 2001 North Tyneside, UK 8in 0.35, 39,099 Running from 0.25 micro m Q2 2001

-jg

So they are dumping part of their .5u and .35u+.25u facilities.

Jim, there's an old thing I learned a long time ago. You don't buy your own stock back. If the best you can do with your active company cash is buy back your stock from passive investors, if you can't do better with the money than those feeble expectations would have from the money, you simply shouldn't be in business at all. If worried about LBOs, go into debt by investing in a new product line or something. But don't buy your own stock back. It's money you've pried out of their hands and you had better be able to make it work in an active business better than they can as mere passive investors. A company _sells_ stock because it can use the money better than others can, in some passive savings account.

This smacks of that, to me. If a company making ICs can't use their FABs as well as they can use the money they will get for selling them, they probably shouldn't be in the business of running FABs at all. This "Fab lite" policy worries me. What about you?

Jon

While I don't fundamentally disagree with anything you've said, I'd like to point out that there is more to making chips than just a bunch of equipment and some guy feeding it design files. There is recipe magic and tribal knowledge that might be impossible to transfer to other facilities.

In that vein, some fabs may be staffed solely to provide the manufacturing magic that supports a product line that isn't profitable. Some of these facilities might be in Atmel's portfolio because of acquisitions; i.e. the money shouldn't have been spent.

The implication from this announcement is that Atmel has excess production capacity and/or some very underperforming product lines, neither of which are immediate signs Atmel should get out of the business; merely signs they need to understand their markets better and manage their acquisitions with greater care.

However I am worried. I'm designing in AVR micros and DataFlash memory, and a couple of other divisions use Atmel's RF transceivers. While I think AVR will be "core", I'm not so sure about DataFlash (which has lots of competition) and the RF stuff (which is niche-y and expensive).

Note that was at Sept 2000, so they will be more advanced now. Heilbronn, IIRC, is their Automotive products. The Nantes fab I think went about 1 year ago. This is a bit more up to date

Well, it is the opposite trend to someone like Microchip. We might all grumble about the PIC core, but you have to be impressed by Microchip's ability to make money from what is not leading edge stuff, and to make money on one of the lowest ASPs in the industry.

The other end of the scale is someone like SiLabs (fabless) and companies like Zilog, and even Freescale are also moving "fab lite". I believe all Zilog's new Flash devices are foundry.

Where it bites, is when your designs use a chip that was in the FAB that closed, and it used a process that has not been moved to a foundry :(

Some recent-memory examples of this, were Philips Coolrunner cplds, and AMD SPLDs. In those cases, the fab-rug was pulled, terminating products earlier than normal.

-jg

This is so true. For such a high tech process it depends on really skilled people to make it work.

...

The RF stuff went in the sale to E2V, although I have had a written statement from E2V saying that they will continue the RF side (I've designed into several products), I'm not too convinced. Time to look elsewhere for longevity I think. Jim

It is a concern. I've been burned with fabless flash. Might be good to look at ST's nand flash.

Hard to say. These details _may_ apply, or not. And I wouldn't know, because I'm not privy to the details. But looking from the outside, we cannot belabor them, either. All we can do is see what the big picture is looking like. I've boiled it down to the fundamentals. That means I've also boiled away a lot of reality in doing so. But this is the nugget that stands out like a sore thumb when I am done with it.

Each of us has to act like a spider in a web and 'feel' the vibrations from this. How we each respond is our own business.

Here's my "spider sense" at work:

One of the really sad things here is that we are talking about 1300 employees, as well. It takes a lot of effort to get employees into a company, give them desks, walls, phone service, as well as all the time invested in the various relationships. All this goes away. A company should prefer to keep their employees and take risk at going into new markets with them. If the company is obviously overstaffed, then these employees obviously have the time to apply themselves to a new business opportunity. And they are already hired, already have all the time investment in them, have desks, and so on. Way ahead of competition, that way. The only question is whether or not you believe in yourself as a company enough to go for it.

Tektronix is a case in point. Luckily, this is a case where I got a chance to talk with one of the board members on a personal 1:1 basis for a few hours circa 1985. I had only left the company about two years before and in that time I'd noticed that their employee loyalty was way down. When I was there, a boss need only merely suggest the idea of staying a weekend or an evening to get something resolved and folks did it in droves. That had changed and I was bothered by that.

Tek had over $650 million at US Bank in 1982 (10k report), undedicated to anything in particular. Not salaries, etc. It was just an asset. They had no long term debt, no short term debt -- to speak of. They owned property around the state of Oregon, including Redmond, Bend, and elsewhere, as well. And they were worried about at least two things. One was an LBO. The other was the fact that their gross revenue per employee was an atrocious $65k. This, at a time when IBM was at about $125k.

So the board decided that they needed to buy their own stock back with all that cash sitting in the bank. That would reduce their exposure as an LBO (not so much, but some.) And they also decided to take the non-risky approach to solve the revenue/employee by reducing the number of employees. It was either that, or increase their revenue. (Revenue isn't directly controllable, but getting rid of employees is.)

They offered early retirement, as I learned from meeting with this board member, to some 810 long time employees. The board expected to see about 200 accept, give or take. They got 795 acceptances. Just about everyone who'd been their for 20 years or more. Gutted right away. In less than one year.

In addition, they now would fire people they didn't have a ready slot for instead of moving them around to see if they could fit. And in the process of going from 24,000 employees to some 14,000 (memory fades here on exact numbers, but this is ballpark) in a few years, they also lost their internal reserve of attitude. Employees didn't consider themselves an integral member of a community working together where they all sunk or swam together, but from a much narrower view where either side might pick up and leave the other to fend for themselves. Two weeks notice became the norm, on both sides.

The right stand to take, in the face of being an LBO target and in the face of poor revenue/employee, especially in the case of Tek where they had ready access to more than half a billion dollars entirely within their control and probably the ability to borrow another billion and a half almost at a whim, and with the excess unused land they owned, they could have walked into any business line they wanted to -- I don't care what it is -- with 10,000 excess employees already hired and in their desks, two billion dollars of fluid, working capitalization, and moved into anyplace in force to bring their revenue line up. The shift from excess cash in the bank to being in debt would have immediately removed them as an LBO target. And they would be doing what any company should be doing with all those resources available.

Any company would have given their eye teeth and their own children for an opportunity like this. And in this case, Tek would not have needed to go begging for this kind of capitalized entry. They would have been in full control, flush with cash, already bursting with employees ready to go and in their desks. Going into business just doesn't get any better than that. Period.

What did happen was wrong on its face. It demonstrated little more than their own lack of confidence in their abilities to manage their own business. (They weren't buying back their stock because they were taking themselves private, they were doing so simply because they wanted to get rid of an excess of cash that might be used against them in an LBO attempt.) An active business manager offers stock because they believe in their ability to create more with that money than others can. Buying back stock simply to spend cash is a statement that you can't think of a better way to use it. And that is sad.

They needed to dodge an LBO and they needed to improve a key ratio. They had the cash, no debt, the ability to borrow, and the existing staff already hired up and in desks. In that situation, they chose use their cash to buy back stock and to turn their backs on their already huge investment in existing employees. This neither removed the LBO risk (they still weren't in debt) much nor did it move in the right business direction (revenue growth.) They could have shouldered into any business they wanted to grab, with cash aplenty to spend, put themselves into debt (substantially reducing LBO risks) and worked in the right direction of growing their revenue by entering some market.

If anything does, this tells me that they didn't believe in themselves.

In talking with this board member, he largely agreed with this analysis and instead tried to explain to me about the conservative nature of some of the board members -- professor from Reed college, and so on. Oh, well. Folks would have begged for a chance like they had. And they completely blew the opportunity. (At the time I was talking with him, this wasn't 20/20 hindsight. Tek was still in the middle of restructuring and downsizing and selling off parts of its business. But time has born out this analysis, anyway.)

...

I still imagine the bigger picture here is significant. Atmel is not taking what looks like some modest step -- but is making a sea change that represents an internal belief about itself. And while I agree completely that details matter and that it could be other than I imagine here, my spider sense is tingling.

Jon

I think the norm is to sell the fabs as 'going concerns', (or similar to the Nantes sale) - so that means not all the jobs go away. Indeed, as you see when Atmel brought Tynside 6 years ago, it came with a loading commitment from Infineon. I think that is also common, and in both the buyers and sellers interests in the short term at least.

-jg

That's good news to hear.

Thanks, Jon

The World has too many people making too many widgets . The demand is not there ... The oversupply of workers is 10 times the demand ..

We dont need Intel , nor Microsoft , nor AMD , ATMEL , H.P. MicroChip and hundreds more .

The P4 Pent' will not be made at end of 2007 .

Linux will get a free shell , useable by common people , you wont know you are using Linux . Free ....

Do you understand what FREE means !!!!

It makes that 10 times too many workers look like 1000 times too many workers !!

Our schools teach that if you get skilled , there will be a job . But if machines succeed in doing what those educational systems say they will , where's the "job"?!! , no modern machine needs a $20/hour worker to push its button , turn its crank ..

. Thus all machine jobs , go offshore at $1/hour . Do you want to work in Honduras ?!!

I laugh when i read Detroit auto workers get $2/hour raise . In a free market system , its IMPOSSIBLE to get a job in a successful country , all jobs are pushed OFFSHORE for labor rates !! Just wait til the govt has to shut down all China imports , foe screaming US workers "We want our jobs back " but finds they were not makin profits , cause China was subsidized by US tax payers/investors !! It was all phony ...

Next time you see Intel or Ford workers punching the clock , "see" phony , govt "forced" occupations , that will bankrupt the USA in 2015 .

The USA will lose 250 million jobs .....

The new "skill" will be capitalist , but so competitive , you must earn $10 million min' , just to live here .. Rich people from all over the world will rush here ....

___________________________________________________________

larwe wrote:

I do electronic design and have never used a PLD ..... It looks too much like proto typing !! You cant sell proto types ....

Its all over , turn out the lights , the party is over for I.C. corporations . We dont use what they make ....

By 2010 , 99% S/W 90% h/w workers will be GONE ! The P4 will stop production , end of 2007 . Microsoft will be out of business , no one will use its software ..

A free shell that "looks and feels " like WXP will make Linux totally transparent .

Jim Granville wrote:

That may be true, though I can't see why anyone here would give a rat's ass about that particular part. It's obsolete in any case, having been replaced by the Core family.

In 2010 there will be probably more than 5%, though likely less than

10% more jobs in both hardware and software design, in first world countries (on a simple headcount basis).

You really need a new supplier of whatever drugs it is you're taking; clearly your present connection is cutting the stuff with drain cleaner or something of that ilk.

Come back when you've sobered up and wiped the rabid foam off your chin, not before.

No, PLDs are not used in prototypes; Try things like some game controller interfaces, and cell phone expansion units.

Who is 'we' - are you more than one person ?

How do you think the newgroup posting you wrote, made its way to my desk ?.

and that free Linux that everyone will be using, will run on what, exactly ?

-jg

The 20% of tech workers in Silcon Valley that lost their jobs in 2000 have permanently been pruned from the work force. Silicon Valley companies are prospering and hiring again ... in India.

[snipped]

On a virtual machine of course :-)

"Jim" skrev i meddelandet news:pWCgh.6027$ snipped-for-privacy@newsfe1-win.ntli.net...

E2V is part of the Atmel Grenoble facility, and many of the RF parts are designed/manufactured in Heilbronn.

--
Best Regards,
Ulf Samuelsson
This is intended to be my personal opinion which may,
or may not be shared by my employer Atmel Nordic AB

Stop using FPGA's then, they are almost all fabless.

--
Best Regards,
Ulf Samuelsson
This is intended to be my personal opinion which may,
or may not be shared by my employer Atmel Nordic AB

Don't feed the troll. For troll verification check out some of his posts on rec.crafts.metalworking.