DigitalOptics Announces Strategic Cutbacks

November 16, 2012—DigitalOptics Corporation (DOC), a wholly owned subsidiary of Tessera Technologies (San Jose, Calif., U.S.A.) announced on 14 November a strategic refocusing of its core business to micro-electromechanical-systems (MEMS)-based camera modules used in mobile phones. DOC will reduce its workforce of 450 by about 180 employees, primarily by ceasing operations at its Tel Aviv, Israel facility and selling or possibly closing its facility in Charlotte, N.C., U.S.A. The reductions, which are not central to MEMS camera module production, will not affect its manufacturing operations in Zhuhai, China. The company says the reductions will save between $15 million and $18 million in annualized operating expenses by the second quarter of 2013.
 
"Our goal at DOC is to become a significant supplier of next-generation camera modules for mobile phones," said Robert A. Young, president and chief executive officer of Tessera Technologies. "Camera module features and functions have increasing importance to consumers in the mobile-phone market. The changes announced today will focus DOC on that market and are an important part of driving the business towards profitability."
 
The company has begun construction of an optical component manufacturing site in Taiwan and is preparing its production facility in Zhuhai to manufacture the next-generation MEMS camera modules, which are expected to ship in the first half of 2013. The DOC MEMS-based camera module solutions provide actuator-based camera features, including autofocus, extended depth of field, zoom, image enhancement and optical image stabilization. DigitalOptics also offers customized micro-optic lenses from diffractive and refractive optical elements to integrated micro-optical subassemblies.
 
DOC plans to spread the staff reductions and facility dispositions over the next two to three quarters to ensure business continuity and relevant legal compliance. In connection with these actions, the Company expects to incur charges of approximately $4 million to $5 million in the fourth quarter of 2012 and $1 million to $2 million in the first quarter of 2013, not including any tax-related charges or potential charges associated with the disposition of the Charlotte facility.