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ST Micro to shut three plants to cut cost

ST Micro to shut three plants to cut cost
PTI
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First Published: Wed, Jul 11 2007. 07 14 PM IST
Updated: Wed, Jul 11 2007. 07 14 PM IST
New Delhi: The Anglo-French semiconductor company, ST Microelectronics on 11 July announced that as part of its decision to deconsolidate its Flash memory business, it will close down three of its manufacturing operations in the US and in Morocco.
However, the decision would not impact its Indian operations, which basically is about chips designing.
“This is STs global strategic initiative related with manufacturing. It does not impact ST India as the local focus remains on design engineering and business growth,” Vivek Sharma, Vice President EMR and Director India Design Center said.
Once they are completed, the company expects these measures to generate approximately $150 million per year in savings in the cost of goods sold. The related pre-tax impairment and restructuring charges are expected to be in the range of $270 million to $300 million, including approximately $250 million in cash charges.
Over the next three years all products manufactured at these sites -- Phoneix, Arizona and its back-end packaging and test facility in Ain Sebaa, Morocco -- are re-qualified at other facilities.
As a result of this earlier programme, most of STs 6-inch fabs in Europe were phased out or converted to 8-inch manufacturing and ST realised savings of more than 150 million dollars per year.
The semiconductor industry requires unrelenting progress and were continuing our drive to grow revenue by developing and introducing new products, by emphasising our existing major-customer initiative, and by expanding our customer base,“ said Carlo Bozotti, President and CEO of STMicroelectronics.
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First Published: Wed, Jul 11 2007. 07 14 PM IST