Siltronic adapts capacity for 150 millimeter silicon wafers to market demand

  • Production of 150 millimeter silicon wafers at portland (Oregon, USA) to be discontinued in third quarter of 2012

  • Personnel capacity to be reduced for 150 millimeter wafers at Burghausen

  • Siltronic’s CEO von Plotho: “Consolidating 150 millimeter wafer production at one site increases plant utilization, improving our fixed-cost coverage”

Siltronic, the semiconductor subsidiary of Wacker Chemie AG, intends to streamline its production capacity for 150 millimeter silicon wafers. For this reason, Siltronic is planning to stop producing this wafer diameter at Portland (Oregon, USA) in the fall of 2012. The Munich-based chemical Group announced this today. The decision means that Portland’s current workforce of some 750 will be reduced by about 350. The affected personnel will receive severance packages. Siltronic will continue to produce 200 mm wafers at Portland.

At Burghausen (Germany), Siltronic is also adapting its 150 millimeter wafer line to the permanently low level of demand. Due to this process and other steps to increase productivity, there will be about 150 job cuts at the site. Implementation of the measures is scheduled for this year. The job cuts are to be made without involuntary layoffs, primarily by offering those affected jobs at the Group’s other units in Burghausen. The exact details of the plan are currently being discussed with employee representatives.

“Consolidating 150 millimeter wafer production at Burghausen, while reducing personnel capacity there at the same time, enhances plant utilization at this site, improving our fixed-cost coverage,” explained Christoph von Plotho, Siltronic’s president and CEO. As a result, Siltronic anticipates an overall earnings improvement of about €30 million per year, starting 2013. These measures are expected to cause non-recurring expenses of about €15 million, which will be reflected in EBITDA (earnings before interest, taxes, depreciation and amortization).

By consolidating its 150 millimeter capacities, Siltronic is building on the structural improvements already made and adapting output to market demand. In doing so, Siltronic is pursuing its lead-site strategy, adopted three years ago, to concentrate silicon-wafer production at single sites according to diameter.

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