Fujitsu Ltd. will close its flash memory plant in Oregon by the end of January because of weak demand for flash memory, the company announced Thursday.

The Gresham, Oregon, plant will be closed and the company will liquidate the assets so it can consolidate flash production in three factories in Aizu-Wakamatsu, Japan. Those factories are operated by Fujitsu's joint venture with Sunnyvale, California-based Advanced Micro Devices Inc. (AMD), called Fujitsu-AMD Semiconductor Ltd. (FASL). The Gresham closure will affect 670 employees, Fujitsu said.

While all 670 employees will remain on Fujitsu payroll until Jan. 31, 2002, only 140 employees will show up for work at the plant tomorrow, Fujitsu spokeswoman Emi Igarashi said. The remaining employees will stay with the company for between 90 and 120 days to assist in closing the plant, Igarashi said. On Feb. 1, all 670 employees will begin to receive their severance packages, she said.

The three FASL factories in the Aizu-Wakamatsu region account for roughly 65,000 wafers a month, said AMD spokesman John Greenagel.

The Oregon plant was Fujitsu's first wafer fabrication plant outside of Japan. It has been operating at levels well below capacity since the beginning of this year, Fujitsu said.

AMD had hinted in August that it was considering taking a 50 percent stake in the factory, making it part of FASL, with even its board of directors looking at the deal favorably, but the market for flash memory has declined even further since then. AMD expressed interest in the buyout following Fujitsu's announcement in August that it planned to lay off 16,400 people worldwide.

AMD itself took a hard hit from a decrease in flash sales last quarter, when flash sales dropped 30 percent in its third quarter, causing an estimated US$100 million [M] loss.

Fujitsu now estimates that the flash market won't recover until some time in 2003.

» posted by abennett

IDG News Service

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