News Article
Photomask operations closed
Photronics to close Shanghai facility to reduce operating costs
Photronics has announced that it is closing its integrated circuit photomask manufacturing facility in Shanghai, China. The closure is consistent with Photronics strategy to reduce costs and lower its operational breakeven point. In connection with the announced closure, Photronics expects to record an after tax charge of approximately $10 million to $14 million in fiscal 2009. Approximately 90% of the total charges will be attributed to non-cash items. The Company also estimates that 75 employees will be affected by the closure. Due to the ability to service customers from other Photronics' locations, the Company expects minimal, if any revenue impact.
"While we remain extremely optimistic in our ability to continue growing our business within Asia, the integrated circuit mask market in China is not materializing as we had hoped" explained Constantine S. Macricostas, Photronics' chairman and chief executive officer. "Unfortunately China's photomask market remains relatively small and we do not foresee a viable path to profitability within an acceptable timeframe. To retain our cost competitiveness we must align our manufacturing capacity with end-market demand" concluded Mr. Macricostas.
After the closure, Photronics will have nine global manufacturing facilities with four located within Asia. The remaining Asian locations include Korea, Singapore, and two sites in Taiwan. Once completed the Company expects to realize annual savings ranging from $4 to $5 million.
"While we remain extremely optimistic in our ability to continue growing our business within Asia, the integrated circuit mask market in China is not materializing as we had hoped" explained Constantine S. Macricostas, Photronics' chairman and chief executive officer. "Unfortunately China's photomask market remains relatively small and we do not foresee a viable path to profitability within an acceptable timeframe. To retain our cost competitiveness we must align our manufacturing capacity with end-market demand" concluded Mr. Macricostas.
After the closure, Photronics will have nine global manufacturing facilities with four located within Asia. The remaining Asian locations include Korea, Singapore, and two sites in Taiwan. Once completed the Company expects to realize annual savings ranging from $4 to $5 million.
