Amkor restructuring cuts workforce

Amkor Technology Inc., a semiconductor test and packaging firm, has made public that it took a $4 million charge in 4Q11 for restructuring costs associated with reduction in its workforce. However, the company did not give any details on how many jobs were cut.

An Amkor spokesperson said the company slashed jobs in the third quarter and fourth quarter of the previous year, which greatly affected its manufacturing facilities in the Philippines.

"We continued to focus on cost reduction initiatives in the fourth quarter," said Joanne Solomon, Amkor's executive vice president and chief financial officer, in a statement.

The company said it has also initiated a voluntary retirement program in Japan as part of its continuing efforts to rationalize its cost structure. The company said it expects to take a charge of about $6 million in the first quarter, depending on how many employees choose to take the voluntary retirement.

Amkor reported net sales of $684 million for the fourth quarter, down 8 percent from the previous quarter and 9 percent from the year-ago quarter. The company reported a net income for the quarter of $25.6 million, down 50 percent from the previous quarter and down 73 percent compared to the year-ago quarter.

For the full year 2011, Amkor reported sales of $2.78 billion, down 5 percent from 2010. The company reported a net income for the year of $92 million, down 60 percent from 2010.

"During the fourth quarter we saw record quarterly sales in our wireless communications end market driven by strong demand for smartphones and tablets," said Ken Joyce, Amkor's president and CEO, in a statement. "We also experienced a seasonal decline in gaming and consumer electronics and some softness in demand in the networking, automotive and industrial areas."

Amkor said it expects sales in the first quarter to decline 3 to 10 percent sequentially to between $615 million and $665 million.

"We continue to focus on improving utilization and rationalizing our cost structure," Joyce said. "These efforts are gaining traction and we expect that our gross margin in the first quarter will be the bottom for the year."

- Dylan McGrath
??EE Times