Special Charges

12 Months Ended

Oct. 29, 2011


5.	Special Charges

On an on-going basis, the Company monitors global macro-economic conditions, and continues to assess opportunities for improved operational effectiveness and efficiency and better alignment of expenses with revenues. As a result of these assessments, the Company has undertaken various restructuring actions over the past several years. These actions are described below.

The following table displays the special charges taken related to these actions and a roll-forward from November 1, 2008 to October 29, 2011 of the employee separation and exit cost accruals established related to these actions.


			Consolidation
	Closure of Wafer		of a Wafer				Closure of Wafer
	Fabrication		Fabrication		Reduction of		Fabrication		Total
	Facility		Facility in		Operating		Facility		Special
Statement of Income	in Sunnyvale		Limerick		Costs		in Cambridge		Charges

Workforce reductions	$	—	$	—	$	1,627	$	—	$	1,627
Change in estimate		—		1,461		—		—		1,461

Total Fiscal 2008 Charges	$	—	$	1,461	$	1,627	$	—	$	3,088

Workforce reductions		—		—		26,583		7,446		34,029
Facility closure costs		—		1,191		2,411		57		3,659
Non-cash impairment charge		—		—		839		14,629		15,468
Other items		—		—		500		—		500

Total Fiscal 2009 Charges	$	—	$	1,191	$	30,333	$	22,132	$	53,656

Workforce reductions		—		—		10,908		—		10,908
Facility closure costs		375		—		—		4,689		5,064
Non-cash impairment charge		—		—		487		—		487
Other items		—		—		24		—		24

Total Fiscal 2010 Charges	$	375	$		$	11,419	$	4,689	$	16,483

Workforce reductions		—		—		2,239		—		2,239

Total Fiscal 2011 Charges	$	—	$	—	$	2,239	$	—	$	2,239


				Consolidation
	Closure of Wafer			of a Wafer						Closure of Wafer
	Fabrication			Fabrication			Reduction of			Fabrication			Total
	Facility			Facility in			Operating			Facility			Special
Accrued Restructuring	in Sunnyvale			Limerick			Costs			in Cambridge			Charge

Balance at November 1, 2008	$	1,747		$	11,754		$	1,501		$	—		$	15,002

Fiscal 2009 special charges		—			1,191			30,333			22,132			53,656
Severance payments		—			(11,802	)		(21,156	)		(756	)		(33,714	)
Facility closure costs		(1,578	)		(1,164	)		(1,195	)		(57	)		(3,994	)
Non-cash impairment charge		—			—			(839	)		(14,629	)		(15,468	)
Other payments		—			—			(503	)		—			(503	)
Effect of foreign currency on accrual		—			333			20			—			353

Balance at October 31, 2009	$	169		$	312		$	8,161		$	6,690		$	15,332

Fiscal 2010 special charges		375			—			11,419			4,689			16,483
Severance payments		—			(302	)		(12,223	)		(5,337	)		(17,862	)
Facility closure costs		(544	)		—			(1,216	)		(4,079	)		(5,839	)
Non-cash impairment charge		—			—			(487	)		—			(487	)
Other payments		—			—			(24	)		—			(24	)
Effect of foreign currency on accrual		—			(10	)		(84	)		—			(94	)

Balance at October 30, 2010	$	—		$	—		$	5,546		$	1,963		$	7,509

Fiscal 2011 special charges		—			—			2,239			—			2,239
Severance payments		—			—			(3,913	)		(1,352	)		(5,265	)
Facility closure costs		—			—			—			(611	)		(611	)
Effect of foreign currency on accrual		—			—			4			—			4

Balance at October 29, 2011	$	—		$	—		$	3,876		$	—		$	3,876

Closure of Wafer Fabrication Facility in Sunnyvale

The Company ceased production at its California wafer fabrication facility in November 2006. The Company paid the related lease obligation costs on a monthly basis over the remaining lease term, which expired in March 2010. The Company recorded a one-time settlement charge of $0.4 million in fiscal 2010 related to the termination of the lease. This action was completed during fiscal 2010.

Consolidation of a Wafer Fabrication Facility in Limerick

During fiscal 2007 through fiscal 2010, the Company recorded special charges of $16.4 million as a result of its decision to only use eight-inch technology at its wafer fabrication facility in Limerick. These special charges included $14.9 million for severance and fringe benefit costs in accordance with the Company’s ongoing benefit plan for 150 manufacturing employees and $1.5 million for clean-up and closure costs that were expensed as incurred. The production in the six-inch wafer fabrication facility ceased during the fourth quarter of fiscal 2009. This action was completed during fiscal 2010.

Reduction of Operating Costs

During fiscal 2008 through fiscal 2010, in order to further reduce its operating cost structure, the Company recorded special charges of approximately $43.3 million. These special charges included: $39.1 million for severance and fringe benefit costs in accordance with its ongoing benefit plan or statutory requirements at foreign locations for 245 manufacturing employees and 470 engineering and SMG&A employees; $2.1 million for lease obligation costs for facilities that the Company ceased using during the first quarter of fiscal 2009; $0.8 million for the write-off of property, plant and equipment; $0.5 million for contract termination costs and $0.3 million for clean-up and closure costs that were expensed as incurred; and $0.5 million related to the impairment of intellectual property. The Company terminated the employment of all employees associated with this action and is paying amounts owed to them as income continuance.

During fiscal 2011, in order to further reduce its operating cost structure, the Company recorded a special charge of approximately $2.2 million for severance and fringe benefit costs in accordance with its ongoing benefit plan or statutory requirements at foreign locations for 25 engineering and SMG&A employees. As of October 29, 2011, the Company still employed 13 of the 25 employees included in this cost reduction action. These employees must continue to be employed by the Company until their employment is involuntarily terminated in order to receive the severance benefit.

Closure of a Wafer Fabrication Facility in Cambridge

During fiscal 2009 and fiscal 2010, the Company recorded special charges of $26.8 million as a result of its decision to consolidate its Cambridge, Massachusetts wafer fabrication facility into its existing Wilmington, Massachusetts facility. These special charges included: $7.4 million for severance and fringe benefit costs recorded in accordance with the Company’s ongoing benefit plan for 124 manufacturing employees and 9 SMG&A employees; $14.6 million for the impairment of manufacturing assets; $3.4 million for lease obligation costs for the Cambridge wafer fabrication facility, which the Company ceased using in the first quarter of fiscal 2010; and $1.4 million for clean-up and closure costs that were expensed as incurred. This action was completed during the third quarter of fiscal 2011.