Micron to cut staff by 15%
Chip maker cites lower demand and product oversupply
IDG News Service - Micron Technology Inc. and Intel Corp. plan to shut down their joint production of NAND flash memory from a plant in Boise, Idaho, and Micron plans to lay off about 15% of its workforce in another sign that the economic meltdown is taking its toll on some tech companies.
The moves are a result of a combination of lowered customer demand and product oversupply in the market, Micron said in a statement.
Intel and Micron, through their IM Flash Technologies joint venture, were supplying NAND flash memory from Micron's Boise facility. The shutdown will reduce the joint venture's NAND flash production by about 35,000 wafers per month, in the factory using 200-millimeter manufacturing lines per month. IM Flash Technologies also has a facility in Lehi, Utah, which has 300mm manufacturing lines.
Micron's 15% workforce reduction will occur over the next two years and will primarily affect employees at the Boise facility. According to Micron's Web site, the company has 22,600 employees worldwide.
Companies in the NAND flash market have struggled all year because of an oversupply that has kept prices low. Despite the oversupply, some vendors, including Hynix and Samsung, have continued to build new factories that make NAND flash products, further exacerbating the problem.
Micron expects that expenses related to the restructuring will reach about $60 million. In a statement, Micron chairman and CEO Steve Appleton said that Micron is in a strong position relative to competitors, but that it is not immune to the difficult global economic conditions affecting the market.
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