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Micron implements job cuts, reduces production

Posted: 13 Oct 2008 ?? ?Print Version ?Bookmark and Share

Keywords:Micron workforce? reduce operation? NAND?

Micron Technology Inc. has announced that it will reduce its workforce by around 15 percent and will slash the output of its NAND flash joint venture with Intel Corp. as part of streamlining its IC memory operations.

"IM Flash Technologies (IMFT), the Micron-Intel joint venture, will end its 200mm production at Micron's Boise, Idaho facility," the company said. It added that the shutdown will lower the IMFT's NAND flash production by about 35,000 200mm wafers per month. IMFT will continue to develop NAND at 300mm fabs in Lehi, Utah and Manassas, Virginia.

Micron (Boise) criticized the moves on a lingering memory downturn caused by decreasing demand and product oversupply. It said NAND average selling prices (ASPs) have slid significantly below manufacturing costs, particularly for 200mm lines.

Micron said the workforce downsizing will result in about 3,000 job cuts that would take place in the next two years. "The majority of the job reductions will start with a voluntary program that will occur in Boise as a result of the NAND operation shutdown," the company added.

Micron noted the company is doing cost control measures after reporting a $1.6-billion loss for its fiscal year that ended Aug. 28, including a 20-percent reduction in salaries for senior personnel and an austerity measure for 2009 capital spending.

"Operation shutdowns and related workforce reductions are always painful, but we are pursuing these activities to maintain the company's competitiveness," said Steve Appleton, chairman and CEO, Micron, in a statement.

IM Flash had been planning a 300mm fab in Singapore, but it seems delayed. Micron clarified the Singapore fab would not be equipped in 2009.

Analysts had been expecting growth for the NAND market until ASPs declined earlier this year. Gartner Inc.'s most recent forecast calls for NAND revenue to decrease 10.1 percent this year, while IC Insights Inc. predicts it will be down 14 percent.

"NAND revenue could slide as much as 15 percent this year," a Gartner analyst said, "but it is expected to rebound next year to grow at 15.1 percent."

Micron executives said NAND ASPs decreased about 20 percent during the quarter that ended Aug. 28 and have fallen another 30 percent to 35 percent since the quarter closed.

The company claimed that cash restructuring and other expenses are expected to be about $60 million. "Next year's cash operating margin benefit is expected to be more than $175 million," it noted.

- Dylan McGrath
EE Times





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