Telefunken takes over chip fabrication plant

U.S.-based microchip manufacturer Telefunkin Semiconductors International chose Roseville for its first fabrication plant in the United States.In the $53 million deal, Telefunkin took over the production facility from Renesas, formerly known as NEC, on May 2. "We were hell bent on manufacturing in America," said Subbarao Pinamaneni, CEO of Telefunken Semiconductors International. "We want to protect our international property and we don't want these technologies to go to Asia."The deal came about after NEC and Renesas merged last spring, and realizing it now had a surplus of production capacity, Renesas made the decision to put the plant up for sale. "Looking at the cost structure, it just didn't make sense to expand this place with all the excess capacity they now had as a merged company," said Brent Best, manager of process engineering. Company executives said Telefunken plans to increase its production capacity by nearly triple in the next two to three years, and it also intends to increase its product line by moving into analog production and power management systems."So the power converters that you plug into the wall to charge your cell phone, that's what they are going to be doing," said Trent Johnson, line maintenance manager for Telefunkin. The new Telefunkin products will be going to industrial, medical, automotive and computer applications, Pinamaneni said. Previously, Renesas and NEC produced microchips that were sold primarily to the automotive industry.The company plans to invest close to $60 million in the immediate future for new production and will invest $20 million in each of the following years, Pinamaneni said. Telefunken has two manufacturing sites: one in Heilbronn, Germany, and now the second in Roseville.Company executives said Telefunkin had been searching for a fabrication facility like the Roseville plant in the United States for a long time. The company kept all of the plant's previous employees, saving more than 600 jobs, and many employees have tenure of more than 10 years working at the plant."One of the key things is as they sold the factory, they sold the workforce with it," Best said. "That was one of the other keys for Telefunken was to buy a factory with the resources already in place."Johnson said there is a renewed feeling of excitement around the plant since Telefunken moved in. "They've got so much energy," Johnson said. "I think everyone is optimistic, everyone is looking forward to times where we will be profitable and successful."Pinamaneni said the company expects to create about 200 new jobs in the next two years as it expands."We intend to have a very close relationship with the city as well as the community," Pinamaneni said. "Just like in Germany, we are very involved in the community." Toby Lewis can be reached at tobyl@goldcountrymedia.com.