Tessera is refocusing its digital optics business strategy. The company expects to reduce operating expenses in DigitalOptics Corporation (DOC) and corporate overhead by approximately $78 million, or 45%, on an annualized basis exiting 2013, as compared to 2012.

Tessera says it has determined that it is no longer necessary for DOC to be a vertically integrated camera module supplier. It will instead focus its strategy on the differentiated MEMS-related technologies.

The refocused DOC strategy and restructuring resulted from a business strategy review directed by a committee of independent directors, led by Richard S. Hill, former chairman and CEO of Novellus Systems.   

Tessera expects its reported corporate overhead to be at an annual run rate of approximately $29 million exiting 2013, compared to $47 million in 2012; and DOC operating expenses, excluding cost of revenues and restructuring, impairment and other charges, to be at an annual run rate of approximately $53 million exiting 2013, compared to $88 million in 2012. These reductions will occur throughout the rest of this calendar year.

DOC also expects cost of revenues to decline from $40 million in 2012 to approximately $15 million in 2013 as a result of the change in estimated production volumes, among other things.