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November 19, 2012

Tessera Technologies Shuts Plant in Tel Aviv, Sells One in North Carolina

As Tessera Technologies (News - Alert), Inc. streamlines operations at its unprofitable digital optics business – which sells technology used in cellphone cameras – it will shutter a plant in Tel Aviv and is looking to sell another in North Carolina.

Accounting for a quarter of Tessera's third-quarter revenue, the DigitalOptics unit plans to reduce its workforce by up to 40 percent, or about 180 employees.

But in Zhuhai, China, the job cuts do not involve its manufacturing operations.

Tessera has two businesses: the intellectual property division, which licenses chip-packaging technology, and the digital optics unit. Last year at the digital optics unit, the company cut 15 percent of jobs, and later mentioned that in Yokohama, Japan that it will close its development facility.

But a few months ago, Tessera bulked up the business by buying some assets in Zhuhai, China for $29 million from Flextronics International (News - Alert) Ltd.

In the third quarter, DigitalOptics posted an operating loss of $23.3 million.

Image via Shutterstock

"Camera module features and functions have increasing importance to consumers in the mobile phone market. The changes announced today will focus DigitalOptics on that market and are an important part of driving the business towards profitability," said Robert Young, CEO at Tessera.

In October, the company said that by March 31, 2015, if Young completes the spinoff of the DigitalOptics business, it would reward him with stock options. The company mentioned that over the next two to three quarters, the restructuring will spread, and by the second quarter of 2013, it is expected to yield annualized operating expense savings of $15 million to $18 million.

In the fourth quarter of 2012, Tessera expects to take a related charge of about $4 to $5 million; and excluding tax-related charges associated with sale of the North Carolina facility, $1 to $2 million in the first quarter of 2013.

Want to learn more about the latest in communications and technology? Then be sure to attend ITEXPO Miami 2013, Jan 29- Feb. 1 in Miami, Florida.  Stay in touch with everything happening at ITEXPO (News - Alert). Follow us on Twitter.

Edited by Braden Becker

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