Rockwell commits additional $200 million for expansion of semiconductor manufacturing capacity; accelerated follow-on to previous expansion

Business Wire, July 11, 1995

NEWPORT BEACH, Calif.--(BUSINESS WIRE)--July 11, 1995--In response to overwhelming demand for its personal electronics chips, Rockwell Telecommunications (NYSE:ROK) Tuesday announced plans to invest approximately $200 million to further expand its Newport Beach facility.

This announcement comes as an earlier $200 million, 18-month expansion at the same site nears completion.

"The explosive demand for Telecommunications' products, particularly in the PC modem and multifunction facsimile segments, confirms our 1994 capacity decision," said Don Davis, Rockwell president and chief operating officer. "The current outlook for Rockwell's new PC multimedia and wireless communications products has accelerated our timing of this next phase of investment."

"This year's semiconductor product revenues should exceed $750 million, up 25 percent over last year and demand continues to grow," said Dwight W. Decker, president, Telecommunications. "We need extra capacity and this round of investment is expected to support greater than $250 million of incremental annual revenues."

Groundbreaking will begin this September with initial production scheduled for May, 1996. When completed, the expansion will add 20,000 square feet of Class I clean room space. The new production equipment set will be capable of producing 5000 eight-inch wafer starts per month, starting at 0.5 micron technology and moving quickly to 0.35 micron by early 1997.

"Our recent (Fab V) expansion was completed without a hitch, from kick-off to production startup in less than 12 months,and we expect to cut this already world-class performance to nine months for the new facility (Fab VI)," said John Algeo, vice president, operations, Telecommunications.

Completion of Fabs V and VI will bring Rockwell's total recent investment in Telecommunications' semiconductor businesses to approximately $400 million. The combined expansion will have added 40,000 square feet of clean room and 300 new jobs, and will have increased capacity to a total of 25,000 wafer starts per month.

Rockwell Telecommunications is based in Newport Beach and includes two principal businesses: the Digital Communications Division (DCD), comprised of Modern Systems, Wireless Systems and Network Systems, and the Microelectronics Technology Center (MTC). DCD is the worldwide market leader in fax and data modem chipsets. MTC is a leading supplier of gallium arsenide technology for commercial communications applications.

Rockwell (NYSE:ROK) is a diversified, high-technology company holding leadership market positions in automation, avionics, aerospace, defense electronics, telecommunications, automotive components and graphic systems, with annual worldwide sales of nearly $13 billion.

CONTACT: Rockwell Telecommunications

Eileen Algaze, 714/833-6849

eileen.algaze@nb.rockwell.com

or

Julie Seymour, 714/833-4379

julie.seymour@nb.rockwell.com