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NXP Semiconductors has said that it is undertaking a major restructuring program that will see the closure of four fabs, while consolidating production in three others. The fabs to be closed outright include Fishkill, New York, ‘ICN5’ part of a fab facility complex in Nijmegen and its ‘ICH’ fab at its Hamburg complex. NXP’s fab in Caen, France will be put up for sale, though failure to find a buyer will see the fab shuttered with the other fabs in 2009, the company said. Globally, the restructuring is expected to affect 4,500 employees in manufacturing, R&D and support functions, though the biggest impact is expected to be in The Netherlands and Germany.

NXP said that production would be consolidated at three other fabs in Nijmegen and Hamburg, as well as at its joint venture fab with TSMC in Singapore, SSMC. With the shift of production, NXP will use more advanced process technologies at its existing facilities, enabling lower production costs in the future.

“This restructuring is a tough measure and it is regrettable that we need to let people go. However, the changes will make NXP a strong, profitable and growing company, with a positive cash flow,” commented Frans van Houten, NXP’s Chief Executive Officer(pictured). “NXP is transforming into a globally competitive semiconductor company with scale and leadership in its core businesses. Measures include increasing the competitiveness of our manufacturing base and reduction in our work force, resulting in a leaner, customer focused company, well positioned for growth in our core businesses.”

The restructuring is expected to cost $800 million and generate annual savings of $250 million.