Friday, October 10, 2008
Micron Technology Inc. will cut its workforce by about 15 percent and reduce the output of its NAND flash joint venture with Intel Corp. as part of a restructuring of semiconductor memory operations, the company said Thursday (Oct. 9).
IM Flash Technologies (IMFT), the Micron-Intel joint venture, will halt 200-mm production at Micron's Boise, Idaho facility, the company said. The shutdown will reduce IMFT's NAND flash production by approximately 35,000 200-mm wafers per month, Micron said. IMFT will continue to produce NAND at 300-mm fabs in Lehi, Utah and Manassas, Va.
Micron (Boise) blamed the moves on a lingering memory downturn caused by declining demand and product oversupply. The company said NAND average selling prices (ASPs) have fallen significantly below manufacturing costs, particularly for 200-mm lines.
Micron said the workforce reduction, which will impact about 3,000 jobs, would take place over the next two years. The majority of the workforce reductions, which will begin with a voluntary program, will occur in Boise as a result of the NAND operation shutdown, Micron said.
Micron last week announced cost control measures after reporting a $1.6 billion loss for its fiscal year ended Aug. 28, including a 20 percent reduction in salaries for senior executives and reduction of planned 2009 capital spending.
"Operation shutdowns and related workforce reductions are always painful, but we are pursuing these actions to maintain the competitiveness of the company," said Steve Appleton, Micron chairman and CEO, in a statement.
IM Flash had been planning a 300-mm fab in Singapore, but it remains delayed. Micron said last week that the Singapore fab would not be equipped in 2009.
Analysts had been predicting growth for the NAND market until ASPs collapsed earlier this year. Gartner Inc.'s most recent forecast calls for NAND revenue to decline 10.1 percent this year, while IC Insights Inc. predicts it will be down 14 percent.
NAND revenue could decline as much as 15 percent this year, a Gartner analyst said Thursday, but is expected to rebound next year to grow 15.1 percent.
Micron executives said last week that NAND ASPs declined about 20 percent during the quarter ended Aug. 28 and have fallen another 30 to 35 percent since the quarter ended.
Micron said 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, according to the company.
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