Freescale Puts Two Chip Factories up for Sale

Freescale Semiconductor plans to sell two older chip factories, one each in Toulouse, France, and Sendai, Japan, becoming the latest chip maker to seek ways to reduce costs amid the global recession.

The company, formerly the chip division at Motorola, has tapped the semiconductor sales division of Colliers International, ATREG, to conduct the sale, it said in a statement.

Freescale is looking for a deal that includes a chip supply agreement, the kind of deal contract chip makers often look for when buying older factories. The two facilities produce chips on 6-inch wafers.

The sale would reduce the total number of chip fabrication plants run by Freescale to four, according to information on its Web site.

Chip makers often look for ways to cut costs during economic downturns.

In August, Integrated Device Technology (IDT) agreed to outsource chip manufacturing to Taiwan Semiconductor Manufacturing (TSMC), a move that means its Oregon chip factory will be sold or shut within the next two years. TSMC did not opt to buy the factory.

The company will no longer manufacture chips after the Oregon plant is offloaded. It will become a pure chip designer.

Earlier this year, the chairman of TSMC, Morris Chang, predicted over 20 chip factories will be shut due to the global recession and as companies outsource production instead of upgrading old factories. Upgrading old factories can cost hundreds of millions of dollars, and new state-of-the-art 12-inch chip factories cost around US$4 billion, depending on the size and technology inside.

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