LSI Logic to Close Colorado Springs Manufacturing Facility

Rapid Decline in Demand and Inventory Correction Prompts Closure Decision



Apr 11, 2001, 01:00 ET from LSI Logic Corporation

    MILPITAS, Calif., April 11 /PRNewswire/ -- In response to the adverse
 economic climate and the widespread inventory correction in worldwide
 communications and storage markets, LSI Logic (NYSE:   LSI) today announced
 plans to close its Colorado Springs manufacturing facility.
     The closure of the 1635 Aeroplaza Drive factory will take place in August.
 The facility, which commenced manufacturing in 1983, uses mature process
 technologies.  Approximately 500 employees will be impacted by the decision.
 Many of these employees will be offered transfers and the balance will receive
 a competitive severance package.
     "This decision is precipitated by the weakening national economy, sharp
 decline in end-demand and the build-up of inventory in the supply chain," said
 Wilfred J. Corrigan, LSI Logic chairman and chief executive officer.  "The
 mature technologies utilized by the Colorado Springs facility have been
 particularly impacted by the decline in the overall economy.  We are
 consolidating our manufacturing capacity at our two major sites in Gresham,
 Oregon and Tsukuba, Japan."
     The company estimates it will record restructuring and other charges of
 approximately $120 million to $150 million for fixed asset write-downs,
 severance, direct exit costs and other expenses associated with the closure of
 the Colorado Springs facility.  The company is in the process of refining its
 estimates for the charges.  The restructuring charge will be recognized in the
 second quarter, and other related charges will be incurred in the second and
 third quarters of 2001.
     Joe Zelayeta, LSI Logic executive vice president for Worldwide Operations,
 said that LSI Logic will have more than adequate world-class capacity to meet
 the anticipated demand for its ASIC and standard product solutions.
     The affected employees will be provided with a competitive severance
 package and outplacement assistance.  Some employees will be offered
 relocation to the company's manufacturing facility in Gresham, Oregon.
 
     Safe Harbor for Forward-Looking Statements:
     The statements by LSI Logic management and the above statements regarding
 future manufacturing plans, personnel numbers, benefits, plant consolidations,
 restructuring and other charges, severance and other expenses and their
 recognition, revenues, manufacturing capacity, and relocation estimates made
 in this news release include forward-looking statements within the meaning of
 Section 27A of the Securities Act of 1933, as amended and Section 21E of the
 Securities and Exchange Act of 1934, as amended. The forward-looking
 statements included in this news release are made only as of the date of this
 release and the company undertakes no obligation to update the forward-looking
 statements to reflect subsequent events or circumstances. The company's actual
 actions and results in future periods may be materially different from any
 suggested in this news release. The company urges the reader to consider the
 risks and uncertainties to which the company is subject and which may cause
 the company's actions and actual results to differ materially from the
 expectations of the company or its management. Such risks and uncertainties
 may include, but may not necessarily be limited to fluctuations in the timing
 and volumes of customer demand, the rate of depletion of customer inventory
 buildup, the company's ability to obtain needed licenses from third parties
 and the company's achievement of revenue objectives and other financial
 targets. Other risks and uncertainties include, but are not necessarily
 limited to the timing and success of new product introductions, the continued
 availability of appropriate levels of manufacturing capacity and the
 realization of benefits from the company's strategic relationships and
 investments. The extent to which the company's plans for future cost
 reductions are realized may also impact its future performance. The company
 operates in an industry sector where securities' values are highly volatile
 and may be influenced by economic and other factors beyond the company's
 control. In the context of forward-looking information provided in this news
 release, reference is made to the discussion of risk factors detailed in the
 company's filings from time to time with the Securities and Exchange
 Commission, including but not limited to filings made during the past
 12 months.
 
     About LSI Logic
     LSI Logic Corporation is a leading designer and manufacturer of
 communications and storage semiconductors for applications that access,
 interconnect and store data, voice and video. In addition, the company
 supplies storage network solutions for the enterprise. LSI Logic is
 headquartered at 1551 McCarthy Boulevard, Milpitas, CA 95035, 866-574-5741
 (within U.S.), 719-533-7679 (outside U.S.), http://www.lsilogic.com .
 
     Editor's Notes:
     1. All LSI Logic news releases (financial, acquisitions, manufacturing,
        products, technology etc.) are issued exclusively by PR Newswire and
        are immediately thereafter posted on the company's external website,
        http://www.lsilogic.com .
     2. The LSI Logic logo design is a registered trademark of
        LSI Logic Corporation.
     3. All other brand or product names may be trademarks or registered
       trademarks of their respective companies.
 
 

SOURCE LSI Logic Corporation
    MILPITAS, Calif., April 11 /PRNewswire/ -- In response to the adverse
 economic climate and the widespread inventory correction in worldwide
 communications and storage markets, LSI Logic (NYSE:   LSI) today announced
 plans to close its Colorado Springs manufacturing facility.
     The closure of the 1635 Aeroplaza Drive factory will take place in August.
 The facility, which commenced manufacturing in 1983, uses mature process
 technologies.  Approximately 500 employees will be impacted by the decision.
 Many of these employees will be offered transfers and the balance will receive
 a competitive severance package.
     "This decision is precipitated by the weakening national economy, sharp
 decline in end-demand and the build-up of inventory in the supply chain," said
 Wilfred J. Corrigan, LSI Logic chairman and chief executive officer.  "The
 mature technologies utilized by the Colorado Springs facility have been
 particularly impacted by the decline in the overall economy.  We are
 consolidating our manufacturing capacity at our two major sites in Gresham,
 Oregon and Tsukuba, Japan."
     The company estimates it will record restructuring and other charges of
 approximately $120 million to $150 million for fixed asset write-downs,
 severance, direct exit costs and other expenses associated with the closure of
 the Colorado Springs facility.  The company is in the process of refining its
 estimates for the charges.  The restructuring charge will be recognized in the
 second quarter, and other related charges will be incurred in the second and
 third quarters of 2001.
     Joe Zelayeta, LSI Logic executive vice president for Worldwide Operations,
 said that LSI Logic will have more than adequate world-class capacity to meet
 the anticipated demand for its ASIC and standard product solutions.
     The affected employees will be provided with a competitive severance
 package and outplacement assistance.  Some employees will be offered
 relocation to the company's manufacturing facility in Gresham, Oregon.
 
     Safe Harbor for Forward-Looking Statements:
     The statements by LSI Logic management and the above statements regarding
 future manufacturing plans, personnel numbers, benefits, plant consolidations,
 restructuring and other charges, severance and other expenses and their
 recognition, revenues, manufacturing capacity, and relocation estimates made
 in this news release include forward-looking statements within the meaning of
 Section 27A of the Securities Act of 1933, as amended and Section 21E of the
 Securities and Exchange Act of 1934, as amended. The forward-looking
 statements included in this news release are made only as of the date of this
 release and the company undertakes no obligation to update the forward-looking
 statements to reflect subsequent events or circumstances. The company's actual
 actions and results in future periods may be materially different from any
 suggested in this news release. The company urges the reader to consider the
 risks and uncertainties to which the company is subject and which may cause
 the company's actions and actual results to differ materially from the
 expectations of the company or its management. Such risks and uncertainties
 may include, but may not necessarily be limited to fluctuations in the timing
 and volumes of customer demand, the rate of depletion of customer inventory
 buildup, the company's ability to obtain needed licenses from third parties
 and the company's achievement of revenue objectives and other financial
 targets. Other risks and uncertainties include, but are not necessarily
 limited to the timing and success of new product introductions, the continued
 availability of appropriate levels of manufacturing capacity and the
 realization of benefits from the company's strategic relationships and
 investments. The extent to which the company's plans for future cost
 reductions are realized may also impact its future performance. The company
 operates in an industry sector where securities' values are highly volatile
 and may be influenced by economic and other factors beyond the company's
 control. In the context of forward-looking information provided in this news
 release, reference is made to the discussion of risk factors detailed in the
 company's filings from time to time with the Securities and Exchange
 Commission, including but not limited to filings made during the past
 12 months.
 
     About LSI Logic
     LSI Logic Corporation is a leading designer and manufacturer of
 communications and storage semiconductors for applications that access,
 interconnect and store data, voice and video. In addition, the company
 supplies storage network solutions for the enterprise. LSI Logic is
 headquartered at 1551 McCarthy Boulevard, Milpitas, CA 95035, 866-574-5741
 (within U.S.), 719-533-7679 (outside U.S.), http://www.lsilogic.com .
 
     Editor's Notes:
     1. All LSI Logic news releases (financial, acquisitions, manufacturing,
        products, technology etc.) are issued exclusively by PR Newswire and
        are immediately thereafter posted on the company's external website,
        http://www.lsilogic.com .
     2. The LSI Logic logo design is a registered trademark of
        LSI Logic Corporation.
     3. All other brand or product names may be trademarks or registered
       trademarks of their respective companies.
 
 SOURCE  LSI Logic Corporation

RELATED LINKS

http://www.lsilogic.com