STMicroelectronics, the Swiss-based manufacturer of electronics and semiconductors, said it plans to close three manufacturing plants by 2010, in a move that will affect about 4,000 employees and cut production costs by $150 million a year. The firm said it expected to offer transfers or 'transition-based incentives' to most of those affected.
According to Carlo Bozotti, president and CEO, 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."
The factories being phased out are located in Carrollton, Texas, Phoenix, Arizona and Ain Sebaa, Morocco. The closings follow the completion of a program to migrate most of its worldwide production of 6-inch wafers to cheaper fabs in Singapore and a number of 'finer-geometry' 8-inch fabs around the world.
The company said the plant closures are not in any way linked to existing plans to spin off its flash memory business into a joint venture with Intel.