08.08.2019
 Mitel Semiconductor Essay

Mitel Semiconductor is a division of the Mitel Company that produces semiconductors, which tend to be used in the fabrication of integrated circuits for consumers in the aerospace, car, and any electronics sectors. Semiconductor product sales accounted for approximately 15 percent of Mitel corporate revenue and the company held a seven percent market share from the one billion dollars dollar business communications semiconductor market in 1995. Kirk J. Mandy, vice president and general administrator of the Mitel Semiconductor section is facing the challenging task of choosing investment choices for the division, making sure sustainability and increased business for the corporation over the following five years. Kirk is usually faced with many alternatives, which include:

1 ) Maintain the status quo, and having the Bromont herb continue to use 100mm wafers. installment payments on your Convert Bromont to bigger wafers, 150mm, 200mm, or 300mm. three or more. Contract away fabrication to other services.

4. Enhance capacity throughout the acquisition of additional semiconductor establishments.

Considerations

There are lots of factors which will need to be taken into consideration, outside of the alternatives themselves. One such factor is that, because of Mitel previous financial failures, the corporation has a policy that over the long term, business has to be able to fund their own progress. Therefore the company is in level of resistance to further personal debt and only readily available cash and cash equivalents can be used for investments. A 15 percent cost of capital is utilized for comparing alternatives.

Another element is it is current distributor of 100mm wafers offers stated it is increasing to larger sizes and will not be able to satisfy the demands at Mitel to get 100mm wafers. This is coupled with an issue of ageing tools at the Bromont facility, which can be becoming increasingly more expensive to maintain and difficult to procure auto parts. One of Mitel's sub-contracted establishments has also just lately stated that it will be no longer able to provide capacity to Mitel past June of 1996.

Another factor when it comes to alternatives is that the business sales and marketing communications segment of the semiconductor marketplace is expected to possess a 18 percent exponentially boosted growth over the next five years. In addition , Mitel managers wish to twice their market place share of seven percent to 18 percent in the same period of time.

A third aspect is that the creation process contained Research and Development at a service in Kanata Ontario, which could be easily expanded at inexpensive, and the manufacturing portion was carried out on the Bromont facility, which a new current potential of 112, 000 wafers per year and would require an extensive expenditure to increase. The masking process was developed out to a good which acquired virtually infinite capacity.

Alternitive#1: Maintaining its status

Mitel can continue to use the 100mm wafers at the Bromont facility. This option would require an up grade to the service that could employ 0. 8-micron line thickness technology, enabling an increase in the amount of DIEs per wafer. This may increase capacity to 156, 800 wafers annually at the 100mm size, priced at 10 , 000, 000 dollars. However , this would likewise require Mitel to source additional wafers in an currently low supply market. Under one building wafer production would expense 40-50 million dollars intended for expansion. Mitel may be able to get 100mm products from services that are converting to larger wafer sizes at an affordable and there might be an option to train current personnel to maintain and fix these kinds of machines.

Alternative# 2: Changing Bromont to Larger Wafer Sizes

Mitel has the choice to increase the wafer sizes applied at the Bromont facility to 150mm, 200mm, or 300mm. Expansion with the facility to 200mm or perhaps 300mm will cost Mitel 150 , 000, 000 and two hundred fifity million us dollars respectively. The capability created simply by these choices, through the use of the bigger wafer and the ability to use lower series width...