Enovix Stock Falls 20% Following Announcement of Strategic Realignment of Fab1

Enovix Corp shares experienced a significant drop of around 20% during intra-day trading following the announcement of a strategic transformation of its Fab1 facility in Fremont.

The company plans to shift Fab1’s focus from manufacturing to serve as its “Center for Innovation,” emphasizing new product development. This change is part of Enovix’s broader strategy to consolidate high-volume manufacturing operations in Asia, closer to its customers and suppliers, while relocating technology development activities to both Silicon Valley and Asia.

As a result of this strategic realignment, the workforce at the Fremont facility that supports continuous manufacturing operations will be reduced, impacting about 185 employees, including over 125 contractors. The company expects to complete this restructuring by the fourth quarter of 2023, aiming for annual savings of approximately $22 million.

Dr. Raj Talluri, President and CEO of Enovix, stated, “We do not take these decisions lightly, and after careful consideration, we determined these changes are necessary to set the company up for long-term success. It has become clear that Fremont is best positioned to be our Center for Innovation, complementing our high-volume manufacturing in Asia.”