Micron plans to cut as many as 2000 jobs as it ends 200-mm work in Boise
Noting that a better DRAM environment has not materialized, Micron will phase out 200-mm wafer manufacturing operations at its Boise, Idaho, facility and will lay off up to 2000 employees in the process.
By Suzanne Deffree, Managing Editor, News -- EDN, February 24, 2009
Micron Technology Inc will phase out 200-mm wafer manufacturing operations at its Boise, Idaho, facility, reducing its headcount by approximately 500 employees in the near term and as many as 2,000 positions by the end of the company’s fiscal year, closing in August.
The announcement comes after Micron in October 2008 announced it would cut 15% of its workforce, or approximately 3,000 jobs, as it scaled back its NAND operations. Micron noted the deteriorating economic conditions and decreased demand for 200-mm specialty DRAM products as having created further challenges for the company’s Boise manufacturing operations and as the reasons behind the additional layoffs.
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Indeed, the DRAM market is expected to remain a harsh one this year after a difficult 2008. Global DRAM unit shipments achieved nearly zero sequential growth in Q4 2008 as ASPs (average selling prices) declined by 38%, above the historical annual average of 30%, according to recent data from iSuppli. While Micron fared better than most of its DRAM competitors -- the supplier saw revenue decline by only 16.4%, the smallest drop among the top-10 DRAM suppliers, and posted the biggest market-share increase among significant DRAM makers in Q4 with its portion of industry revenue rising to 13.8%, up from 10.2% in Q3 -- it faces a continuing cold memory climate in 2009. ISuppli has forecasted total 2009 DRAM revenue will be down 15% from 2008 and expects continued pressure on ASPs.
“We remained hopeful that the demand for these [DRAM] products would stabilize in the marketplace and start to improve as we moved into the spring," said Steve Appleton, Micron chairman and CEO, in a statement Monday. "Unfortunately, a better environment has not materialized, and we are at a point where we wanted to let our employees and the community know in advance what will occur later this summer."
The company did not state when its 200-mm work would completely end at the location, but did state that it has sufficient manufacturing capacity remaining and does not expect any disruption in product supply required for customer needs.
Micron will continue its 300-mm research and development work at the Boise site (pictured) and performs a variety of other activities, including reticle manufacturing, product design and support, quality assurance, systems integration, and related manufacturing, corporate and general services at the location.
Following the layoffs, Micron will employ more than 5,000 in the state.
The company estimated cash restructuring charges will be approximately $50 million and said that will generate a gross annualized operating cash benefit of $150 million. The net operating cash flow effect will be neutral for fiscal year 2009, Micron said.
