Western Digital Says It Will Sell Irvine Facility to Motorola : Manufacturing: The sale, valued at about $115 million, will allow the company to retire at least half of its debt.

Western Digital Corp. Monday announced a tentative agreement to sell its semiconductor manufacturing plant to Motorola Inc. for about $115 million, a deal that comes just two weeks after a proposed sale of the Irvine facility to Rockwell International Corp. collapsed.

Completion of the sale is expected by year’s end and Motorola intends to begin manufacturing computer chips at the plant by early 1994. The proposed agreement calls for Schaumberg, Ill.-based Motorola to supply Western Digital with semiconductors for at least two years after the sale.

“This sale represents part of the new strategy of the corporation,” said Travis White, general manager of Western Digital’s microcomputer products business in Irvine. “We want to improve our balance sheet and this is a positive step in that direction.”

The sale will allow the maker of computer disk drives to retire at least half of its $199-million long-term bank and subordinated debt, officials said. The company reported a loss of $5.1 million, or 14 cents a share, for its latest fiscal quarter, which ended Sept. 25.

While Western Digital will no longer manufacture semiconductors, the company will continue to sell and design semiconductors, said Charles A. Haggerty, chairman, president and chief executive.

“Western Digital will retain and continue to leverage its semiconductor design expertise across existing product lines and into new areas,” he said in a statement.

Mark Matheson, an analyst with Crowell Weedon & Co., a regional brokerage in Los Angeles, said he saw the sale as a positive development for the company.

“I think it’s better not to own a costly facility when you are a company like Western Digital and have such ups and downs in your business.” Western Digital’s stock was up 37 1/2 cents in New York Stock Exchange trading Monday, closing at a six-month high of $8 per share. On Friday, Kidder Peabody & Co. placed a buy recommendation on the company’s stock.

With no explanation, the company on Oct. 12 terminated a tentative agreement with Rockwell International Inc. in Seal Beach to sell the high-tech chip facility, located in the Irvine Spectrum business park.

“After spending four months in negotiations, we felt the long-term partnership didn’t meet the needs of both companies,” White said Monday.

Overall, Western Digital has 6,900 employees, compared to a peak of 7,700 nine months ago. About 1,380 of them work in Orange County.

The chip plant, originally built in 1990, will be Motorola’s first major semiconductor-production facility in California, according to Gary Daniels, general manager of Motorola’s microcontroller technologies group. The company has extensive chip production operations in Austin, Texas, and in Phoenix, as well as in Europe and Asia.

With 1992 sales of $4.48 billion, Motorola’s semiconductor products sector is the largest U.S.-based broad line supplier of semiconductors.