VANCOUVER, Wash. -- Japanese silicon wafer giant Shin-Etsu Handotai Group (SEH) announced plans to shut down its 6-inch lines in the United States. SEH plans to shift its 6-inch production lines from the United States to Malaysia--a move that impacts 25.9% of its workforce, or 350 jobs, in its U.S. subsidiary here.
SEH America Inc.--the U.S. subsidiary of SEH--on Thursday here announced plans to shift its older-generation, 6-inch wafer polishing lines from its U.S. headquarters in Vancouver, to a sister plant in Kuala Lumpur, Malaysia, according to the company. SEH is the world's largest supplier of blank silicon wafers, it was noted.
The cost-cutting move will be completed by mid-June, said Julie Branford, director of human resources at SEH America. The move will not impact its 8-inch wafer production lines, Branford said. "The 6-inch wafer lines represent a smaller part of our business," she told SBN. "The 8-inch lines is our bread-and-butter business."
The move represents SEH's second layoff in the U.S. in the last several months. In April, it reduced its U.S. workforce by 98 employees, or 6%.
It also underscores the tough business conditions in the silicon wafer business. Worldwide silicon wafer shipments declined by 17% in the third quarter of 2001, compared to the second period of this year, according to a forecast from the Semiconductor Equipment and Materials International (SEMI) trade organization here (see Nov. 6 story ).
"Conditions in the silicon market remain poor as the global semiconductor industry continues to weather one of the worst years in its history," said Stanley T. Myers, president and CEO of SEMI of San Jose, earlier this month.
"Quarterly silicon shipments have not been as low since thefourth quarter of 1996," Myers said. "The percent change
from peak to bottom, however, is around 46%, which is
comparable to the recession of 1985," he said.
Other suppliers are also suffering. For example, silicon wafer
supplier MEMC Electronic Materials Inc. recently said an investment group led by Texas Pacific Group has completed the purchase of a 72% stake in the company, and as part of the transaction, MEMC's debt has been restructured to improve its
ability to survive the current industry downturn.
The majority ownership in MEMC was announced last month by
Germany's E.ON AG, an energy service provider that owned 72% of the struggling wafer supplier. E.ON was formed last year by the merger of Veba AG and Viag AG (see Nov. 14 story ).
Earlier this year, Sumitomo Metal Industries Ltd. and Mitsubishi Materials Corp. said they would consolidate their wafer
operations into what they hope will become the world's largest wafer supplier.