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Avago Cuts Manufacturing in Strategic Shift
May 21, 2007 |Estimated reading time: Less than a minute
SAN JOSE, Calif. Avago Technologies expanded its manufacturing outsourcing program as part of a business model shift announced in January 2007. The component supplier will reduce its Singapore manufacturing staff by about 230 people to allot resources to higher value-added activities.
Avago plans to focus on new product introduction (NPI), R&D, marketing, and supply chain management for industrial, automotive, wired infrastructure, wireless communication, and computer peripherals markets. Outsourcing manufacturing of its analog interface components will promote flexibility in the company's cost structure, which should allow it to adjust with market cycles in the electronics assembly industry, said Hock E. Tan, president and CEO. Avago will incur a cash charge equaling about $4 million for the workforce reduction, recorded in the third fiscal quarter.