Dutch electronics giant Philips said it is shutting down a 6in fab line in France on top of a move from New Mexico to New York for an 8in line as the company revealed its full-year loss and the cost of its restructuring.
In all, 18600 jobs were lost over the year, mostly from components, semiconductors and consumer electronics, which had been hard hit by the decline in demand from the IT and telecoms markets, in a bid to reduce capacity.
The company reported a fourth quarter loss of €1.14bn, compared to a profit of €2.8bn for the same period a year ago, as components, semiconductors, consumer electronics and other divisions reported losses.
Total Q4 sales of €9.26bn were 16% down. While it refused to disclose restructuring costs or translated savings, Philips said: "Several uneconomical semiconductor and component facilities were closed, or are in the process of being closed."
An 8in wafer operation in Albuquerque, New Mexico was relocated to Fishkill, New York, and one in Caen, France is having its 6in line closed down.
Philips said the components from these fabs would continue to be supported — Albuquerque operated a 0.5µm BiCMOS line while Caen operates a 0.7µm-and-up bipolar and BiCMOS line.
From the semiconductor division 4000 people — or 12% of its workers — have been laid off from across all sectors.
Philips' total full year loss was €2.6bn compared to a profit of €9.6bn. Sales were down 15% to €32.34bn.
But Gerard Kleisterlee, president and CEO, said prospects are now better, indicating that the decline in demand from its customers had ended.
He said: "Given the economic downturn, especially in ICT industries, 2001 was a tough year for Philips. At the same time this helped create momentum for far reaching change.
"I am encouraged to see the results of our cost reduction efforts and restructuring programmes started to bear fruit in the fourth quarter. As such we have laid the foundation to refuel growth."
Philips added that the severe declines of the IT and telecommunication markets have now stopped, and excess inventories have mostly disappeared.
But the company said: "In general we do not see markets strengthening, therefore we maintain a cautious stand on costs, capital spending, working capital and employment in 2002."
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