DES PLAINES, IL -- Littelfuse plans to transfer its semiconductor assembly and test operation from Matamoros, Mexico to China in a phased transition over two years. Upon completion of the transfer, the Matamoros facility will be closed.

The project is expected to generate approximately $7.4 million in annual savings once the transition is complete. This move will result in pre-tax restructuring charges and transition charges of approximately $6.3 million. Approximately $5 million of this amount will be recorded in the first quarter of 2008, with the remainder to be recorded throughout the transition period.

Manufacturing operations will be consolidated into the company’s existing assembly and test facility in Wuxi, China, and subcontractors located in China. When the transfer is completed, semiconductor assembly and test operations will be in the same location as the company’s new Wuxi wafer fabrication operation, which is scheduled to start production in the first quarter of 2009.

“Combining assembly, testing and wafer fabrication into one facility will increase efficiency and reduce manufacturing costs,” said Gordon Hunter, chief executive officer of Littelfuse. “We are committed to making this transition as seamless as possible for our customers. As part of that commitment, we will maintain continuous production capabilities for all products throughout the move.”

The Matamoros facility produces thyristor surge protection and power control devices. Littelfuse acquired the Matamoros operation in 2003 through its acquisition of Teccor Electronics Corp. Approximately 950 employees in Matamoros will be affected by the move.

“This was a difficult decision given that Matamoros employees have been a significant part of our growth and success,” said Hunter. “However, we believe this move is in the best interest of our company, our customers and our shareholders over the long term.”

For more information about Littelfuse, visit: www.littelfuse.com.