GRESHAM, Ore. -- Continuing to downsize itself in the semiconductor slump, Japan's Fujitsu Ltd. today announced plans to shut down its wafer fab plant here in January--a move that will impact 670 employees, according to the company.
The shutdown also kills the possibility of a flash-memory joint-venture fab between Fujitsu and Advanced Micro Devices Inc. at the site. The two companies had been discussing a possible U.S. venture fab since the summer.
Fujitsu established the Gresham plant in 1988 as its first overseas wafer fab. The facility was originally designed to make DRAMs, but last year, Fujitsu opted to convert the plant to flash memories. But the current IC downturn, coupled with a severe drop in flash-memory prices, caused the plant to operate "well below capacity," said the company.
"The market isn't recovering as fast as the company had expected," said a U.S. spokesman for Fujitsu.
The fab's closing is part of a major restructuring plan at Fujitsu, which plans to cut 16,400 jobs following huge losses in its chip and other operations (see Aug. 20 story ).
As previously reported in August, the company was exploring the possibility of turning the Gresham fab into a flash manufacturing plant for the Fujitsu-AMD Semiconductor Ltd. joint venture, but the plan has been dropped. Fujitsu said a recovery in flash memories now seems likely to be delayed by at least 6-to-12 months later than a previously expected upturn in late 2002.
"There were discussions for AMD to take over a piece of the fab," according to the spokesman. "AMD decided not to do it." AMD could not be reached for comment.
Fujitsu said it will stop production in the Gresham plant in January and liquidate its assets. Flash memory production will be consolidated in Aizu-Wakamatsu, Japan, which is currently the manufacturing facility of the Fujitsu-AMD Semiconductor joint venture in flash memories.
"All employees will remain on the payroll with full benefits until the end of January," said Takashi Yabu, vice president and general manager of Fujitsu Microelectronics Inc.'s Gresham Manufacturing Division. "In addition, we are offering generous severance benefits, and outplacement services will be available."
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