IDT (Integrated Device Technology) has decided to slide from a fab-lite business model to a fabless business model, transferring its internal fabrication processes and related activities currently running in its Hillsboro, Ore, facility to TSMC (Taiwan Semiconductor Manufacturing Co).

The transfer, which has already received approval by both companies and the IDT board of directors, is expected to take up to two years to complete and will cover the lifecycle of all products involved. IDT said it plans to exit the company's remaining fab by the end of the transfer period and noted that its agreement with TSMC does not include transfer or sale of the fab's process equipment or the IDT facility itself. The deal does include, however, existing IDT products currently manufactured at the fab at 0.13-micron process technology and above.

“Over the past year or so, IDT has been shifting gears towards developing application specific solutions for the communications, computing, and consumer markets," said Mike Hunter, VP of worldwide manufacturing for IDT, in a statement today. "Obtaining an agreement with TSMC enables us to take full advantage of their cutting edge manufacturing processes and geometries and is the logical next step in our transformation. This agreement, which will combine IDT system expertise and architecture and the TSMC technology platform, expands our overall global manufacturing capability. It also officially starts the countdown for IDT to move from a fab-lite to a fabless model.”

Ted Tewksbury, president and CEO of IDT, added that a fabless model allows IDT to focus its resources and investments on new product development. “This initiative is a key enabler of our mixed-signal strategy as IDT’s products transition to more advanced process technologies supporting higher levels of speed, complexity, and integration,” he said in the statement.

TSMC noted that IDT has long been a ＆#118alued customer with the foundry and said it will work with the company "step-by-step to ensure a seamless transition."

IDT did not state how, if in any way, its plans to sell the Oregon fab would impact the San Jose-based company's headcount.