Mitel Semiconducter Case Essay

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Management 642 Mitel Semiconductors Ivey Business Case Nick Weller, Brin Conner, Joshua Goldsmith, Brian Gregory 2/14/2012 1 Mitel Semiconductors Mitel Semiconductors is a division of Mitel Corporation. The semiconductors division focuses on the business communications segment of the overall semiconductor market. The segment is relatively small when compared to the semiconductor market as a whole but the segment is experiencing high levels of growth over the next five years. Currently Mitel Semiconductors holds 7% of the business communications segment and management would like to see market share double in the next five to six years. Mitel Semiconductors is quickly approaching full capacity at its Bromont Foundry that performs the…show more content…
The risk to this alternative is the fear that the industry will continue to move into larger sized wafers and it will become increasingly difficult to find suppliers for the 150mm wafer. If that should happen, Mitel would once again be in the same situation. Given the forecasted demand for Mitel’s semiconductors, there is not sufficient cause to upgrade the Bromont Foundry to sizes of wafers greater than 150mm. At anything larger than 150mm Mitel will find itself in an excess capacity situation and have to find ways to sell more integrated circuits. Maintaining Status quo Advantages Disadvantages 4 · Obtain a license for 0.8m technology · High risk to find another supplier for from current supplier · Could upgrade finished in 8 months the wafers - 10 Million to upgrade current equipment · Reduced supply of 100mm wafers with no work stoppage · · Increase capacity by 44,800 wafers Have control of wafer manufactured meant that the alternative supply of wafers would have to be found or developed in house · $40-$50 Million to develop in house in house · Equipment could be purchased for low cost from other FAB’s switching to larger wafer’s · Low production costs and adequate wafer · Cannot meet increased demand for long · Retrain employees on new equipment supply might sustain profits for the near future By maintaining the status quo, Mitel Semiconductors can remain competitive in the short term. Mitel
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