UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) November 21, 1996
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VLSI TECHNOLOGY, INC.
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(Exact name of registrant as specified in its charter)
Delaware 000-11879 94-2597282
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1109 McKay Drive, San Jose, California 95131
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (408) 434-3000
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Not applicable
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Former name or former address, if changed since last report)
<PAGE>
ITEM 5. OTHER EVENTS
On November 21, 1996, VLSI Technology, Inc. (the "Registrant") announced
its plan to cease production in its San Jose, California wafer fabrication
plant by the end of 1997. The Registrant estimates it will take a charge of
between $100 and $120 million in the fourth quarter of 1996 to cover costs
associated with the shutdown, including equipment write-downs, costs related
to sales commitments and severance expenses.
A copy of the Registrant's November 21, 1996 press release announcing and
describing this plan is attached hereto as Exhibit 99.1.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) EXHIBITS
99.1 Press Release dated November 21, 1996.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
VLSI TECHNOLOGY, INC.
/s/ Larry L. Grant
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Larry L. Grant
Vice President, General Counsel and Secretary
Date: November 21, 1996
EXHIBIT 99.1
PRESS RELEASE DATED NOVEMBER 21, 1996
For Media Inquiries: Alan Markow
Vice President, Corporate Communications
(408) 474-5409
For Finance Inquiries: Greg Hinckley
Senior Vice President & CFO
(408) 434-7836
VLSI Technology Announces Plans To End Production In Its San Jose Wafer
Fabrication Facility
San Jose, CA, November 21, 1996 -- VLSI Technology, Inc. (Nasdaq:VLSI) today
announced plans to cease production in its San Jose wafer fabrication plant by
the end of 1997. As a result of this action, the company plans to reduce its
San Jose workforce by approximately 300 people over the next twelve months.
The company also announced that it will take a charge of between $100 and $120
million in the fourth quarter of 1996 to cover costs associated with the
shutdown, including equipment write-downs, costs related to sales commitments
and severance expenses.
VLSI's San Jose plant has been underutilized since the company began shifting
to new markets in 1995. VLSI now focuses on providing semiconductor devices
for cable and satellite set-top boxes, wireless communications such as
cellular phones, networking equipment, computing and secure products.
"These new growth markets require leading edge process technology available at
our newer fab located in San Antonio," said the company's Chairman and Chief
Executive Officer Al Stein. "Despite the excellent performance of our San
Jose fab and its people, the plant no longer supports our business
strategies."
The decision to shutdown the San Jose fab came only after the company had
attempted to increase fab utilization by marketing the plant as a foundry, and
by searching for potential buyers or investors. The company plans to continue
looking at other options to divest itself of the plant.
"While there is pain in this difficult decision," Stein said, "we're convinced
it will enable us to invest appropriately to drive the growth of our company,
and ultimately benefit the vast majority of VLSI's employees, customers and
shareholders."
VLSI President and Chief Operating Officer Rich Beyer noted that the decision
to operate the fab into the second half of 1997 if necessary was a signal of
the company's commitment to its long-term customer base.
"Meeting customer requirements for semiconductors produced in our San Jose fab
was a primary concern in planning this shutdown," said Beyer. "Beginning
today, we're giving our customers a full briefing on the phase out. We will
then align our production schedule with their specific product requirements."
The cutbacks will not affect VLSI's other San Jose-based operations, including
its corporate headquarters, a technology development group and production test
and prototype assembly facilities.
Employees whose positions are eliminated in the shutdown will be given 60 days
notice and a competitive severance package.
Certain matters discussed in this news release are forward-looking statements
that are subject to risks and uncertainties that could cause actual results to
differ materially from those projected. Such risks and uncertainties include:
uncertainty as to the exact timing, cost and effects of the proposed shutdown
of the San Jose fabrication facility; loss of business from the company's
customers whose devices are currently manufactured at the San Jose fabrication
plant and who choose to substitute products from other manufacturers;
unanticipated employee costs relating to the shutdown; inability to retain
employees at the San Jose plant during the phase-out period; success in
implementing cost reduction programs; lower factory utilization and excess
capacity; and other risk factors listed from time to time in the company's SEC
reports, including but not limited to the report on Form 10-K for the year
ended December 29, 1995, and subsequent Form 10-Qs.
About VLSI Technology, Inc.
VLSI Technology, Inc. designs and manufactures System-Level Silicon solutions
based on its FSB[TM] functional system blocks[TM] library. Targeting its
offerings toward the communications, consumer digital entertainment and
computing markets, the company offers its customers advanced system-level
integration capabilities. The company is based in San Jose, California, with
1995 revenues of $720 million, and approximately 3,000 employees worldwide.
Visit VLSI's homepage at http://www.vlsi.com.
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FSB, functional system blocks and System-Level Silicon are trademarks of VLSI
Technology, Inc.
All other brand or product names are trademarks and/or registered trademarks
of their respective owners.
