AMSTERDAM, The Netherlands --- Consumer electronics giant Royal Philips Electronics has announced a recovery plan for its semiconductor division that involves the closure of a wafer fab in San Antonio, Texas, and the cutting of 1600 jobs by the end of the year. About 520 of those jobs are in San Antonio, the company said.
The plan is expected to provide Philips Semiconductor with annual savings of about 250 million euros (about $270 million) and help return the division to profitability in the fourth quarter of 2003. The closure of the San Antonio fab, a facility inherited by Philips with the acquisition of VLSI Technology Inc., together with the previsously announced closure of an Albuquerque, New Mexico fab, is expected to strip out approximately 20% of Philips' CMOS manufacturing capacity.
The recovery plan includes five elements: technical focus, capacity cuts, business simplification, supply chain management, and winning sales, the company said.
Philips said it wants the semiconductor division to focus on cores for consumer applications and get out of non-profitable non-essential businesses. This is expected to deliver annual savings of 200 million euros (about $220 million) and lead to a quarterly R&D spending rate of 240 million euros (about $260 million) by the fourth quarter of 2003 excluding the Mobile Display Systems business.
More aggressive supply chain management is expected to deliver another 50 million euros (about $55 million) of savings.
In addition, under the business simplification heading, Philips Semiconductors plans to consolidate a number of smaller non-manufacturing related sites and associated businesses, mainly in Europe and the USA, the company said.
"With attention to swift and exact execution, we expect that these actions will see Philips Semiconductors again making a positive contribution to the Philips Group in the fourth quarter of this year," said Scott McGregor, chief executive officer of Philips Semiconductors, in a statement.
"With the ongoing softness in the industry, we still face a tough couple of quarters before our efforts will truly show through. As we said at the presentation of our 2002 results, we are prepared to take the tough decisions to not only put things back on track, but more importantly, create a healthy and sustainable profitable business for the future. We know that parts of the plan will be painful to the organization, and our San Antonio employees in particular, and we will do everything we can to work together with all involved, to minimize the impact," McGregor said.
Most of the San Antonio product lines are already dual-sourced, and others will be relocated to other Philips facilities, minimizing the impact on existing customers, the company said.
RSS
Digital
10 emerging technologies to watch:
EE Times has compiled a list of emerging technologies that we think will be worth watching out for in 2010. Biofeedback or thought-control of electronics are among the contenders.
Hot applications in 2010:
We've compiled a list of 10 technology applications you should watch for in 2010, ranging from e-book readers to 3-D TVs. We examine the features that make these apps so compelling as well unresolved issues.
Top 25 predictions for semis in 2010:
2010 is just beginning to unfold in the electronics industry. Looking into our crystal ball, we have released our own chip forecasts--and other predictions--for 2010.
Seven things to fix in 2010:
The editors of EE Times came up with their own informal list of things we hope engineers fix in 2010, spanning everything from nano-lithography to space travel. What do you want to see get done this year?
'09 moves that are shaping the future:
This was a brutal year, but the industry gets a nod for showing grace under fire. Here's our Top 10 guide to the coming year, illustrating what to expect in 2010.
10 CEOs out in 2009:
It's been a tough year for the global electronics industry and CEOs. We survey the dismissal of 10 industry CEOs during the first three quarters of 2009 and what's ahead for the rest of the year.
Notable women in microelectronics:
There is no better time than a global economic recession to examine the keys to successful corporate governance. So, EE Times has compiled an international list that celebrates women who are business and technology leaders in semis.
EE Times updates Silicon 60:
Seventeen companies have been added to the lastest version of our Silicon 60 list of emerging startups. Forty-three companies survived as emerging companies that are still worth watching.
RSS| 
Digital| 
Mobile
