Our "flexible manufacturing" strategy combines capacity from external
foundries with output from our internal manufacturing facilities which allows
us to meet swings in customer demand while limiting capital expenditure requirements
and lessening the burden of high fixed costs, a capability that is important with
our rapidly evolving product portfolio.
As of the end of fiscal year 2017, we owned a wafer fabrication facility in
Austin, Texas. External wafer foundries, mainly in Asia, manufactured approximately
63% of our wafers. We expect that purchase of wafers as a percentage of our
total wafer consumption from our wafer foundry partners will increase in 2018.
We conduct assembly and test operations at our back-end manufacturing facilities
in Cavite, Philippines and Bangkok, Thailand, manufacturing volume products
and packages, which contribute to better leverage of
manufacturing cost. These facilities account for approximately 28% of the
total assembly output and 38% of the total test output. Various subcontractors
in Asia perform the balance of the assembly and test operations.
We have manufacturing services agreements primarily with the following partners:
Advanced Semiconductor Engineering, Inc. (“ASE”) - Agreements for
assembly and test services;
Deca Technologies Inc. - Agreement for manufacturing services.
Fujitsu Semiconductor Limited - Agreements for the supply of product wafer foundry
services, sort services and assembly and test services;
HuaHong Grace Semiconductor Manufacturing Corporation ("Grace") -
Agreement for foundry services;
Semiconductor Manufacturing International Corporation ("SMIC") - Agreements
for foundry services;
SK Hynix Inc. (“SK Hynix”). - Agreements for development and supply
of certain products;
Skywater Technologies Inc. - Agreement for foundry services;
Taiwan Semiconductor Manufacture Company ("TSMC") - Agreement for
foundry services;
United Microelectronics Corporation ("UMC") - Agreement for foundry
services;
United Test and Assembly Center Ltd - Agreement for assembly and test services;
and
Wuhan Xinxin Semiconductor Manufacturing Corporation ("XMC") - Agreement
for foundry services;
