News Article
Flash memory deconsolidation, multi site closure ships out of Europe and into Asia
STMicroelectronics (ST) has announced the decision to deconsolidate its Flash memory business. In this move to further optimise asset utilisation and enhance performance ST will rationalise three of its manufacturing operations.
STMicroelectronics (ST) has announced the decision to deconsolidate its Flash memory business. In this move to further optimise asset utilisation and enhance performance ST will rationalise three of its manufacturing operations. Over the next two to three years -- after all products manufactured at these sites are re-qualified at other facilities -- the Company will wind down operations at its 6-inch (150mm) wafer fab in, Texas, its 8-inch (200mm) fab in Arizona and its back-end packaging and test facility in Morocco. These measures follow the completion of a program to migrate most of ST's global 6-inch wafer production to operationally less-expensive 6-inch fabs in Singapore or to finer-geometry 8-inch facilities around the world. As a result of this earlier program, most of ST's 6-inch fabs in Europe were phased out or converted to 8-inch manufacturing and ST realised savings of more than $150 million per year. ST's 6-inch wafer manufacturing facility in Texas, which was largely spared from this earlier round of consolidation, has been designated for closure this time.ST's Phoenix wafer production plant is a relatively small 8-inch facility using mature technology. In light of its size and technology, the fab would require substantial capital expenditure to be upgraded to the state-of-the-art technology necessary to continue efficient operations over the long term. In order to optimise asset utilisation and improve its cost structure, ST decided not to expend the resources necessary to upgrade it, and to shift its capacity -- directly or indirectly -- to other plants or subcontractors, in Asia and in Europe.Also with an eye toward improving cost structure, ST will enhance the utilisation of its Bouskoura 2000 testing and packaging facility in Morocco by transferring to it most of the operations of the older Ain Sebaa (Casablanca) plant which, due to its age and location, is unsuitable for upgrading and will consequently be progressively phased down and closed. Some mature product lines will be transferred to subcontractors."The semiconductor industry requires unrelenting progress and we're continuing our drive to grow revenue by developing and introducing exciting new products, by emphasising our existing major-customer initiative, and by expanding our customer base," said Carlo Bozotti, President and CEO of STMicroelectronics. "Growing revenue is important, but we're also committed to improving our cost structure by reducing the number of our manufacturing sites and, as a result, trimming excess capacity and lowering manufacturing overhead. We will manage a smooth transition for the benefit of our customers and of the employees affected by these measures."Reza Kazerounian, Corporate Vice President and General Manager of ST's North America Region, stated, "Our commitment to American customers remains stronger than ever. We will concentrate our efforts on supporting customers through our wide-ranging North America-based network of R&D, product development and application centers."ST estimates these moves will involve approximately 4000 employees worldwide. The Company expects to offer transfers or transition-based incentives to most of those involved, and anticipates that most will remain in their jobs throughout the transition period.
