WACKER closes semiconductor wafer production in Japan

  • 200 millimeter wafer and monocrystalline silicon ingot production in japan scheduled to be discontinued by mid-2012

  • Transfer of production volumes to singapore and portland (oregon, usa) sites will increase capacity utilization there, thus optimizing fixed-cost coverage

  • Siltronic ceo von plotho: “we are striving to mitigate plant closure effects on employees as much as we can”

Siltronic, Wacker Chemie AG’s semiconductor division, intends to streamline its 200 mm wafer production capacities. As a result, Siltronic plans to close its production site in Hikari, Japan, by mid-2012. The Munich-based chemical group announced this decision today. Hikari’s production volumes shall be transferred to Siltronic’s existing 200 mm wafer plants in Singapore and Portland (Oregon, USA), optimizing capacity utilization at these sites’ facilities. The planned closure is expected to involve expenses of some EUR 70 million. Thereof, around EUR 45 million will be cash-relevant. These expenses had not been included in WACKER’s most recent earnings forecast for fiscal 2011 which calls for earnings before interest, taxes, depreciation and amortization (EBITDA) at last year’s level. Currently, Siltronic is producing at its Hikari site wafers for the semiconductor industry as well as monocrystalline silicon ingots, employing a staff of some 500. To ensure optimum support of its Japanese customers, Siltronic will continue to employ a local sales force and application engineering in Japan.

By closing its Hikari site, Siltronic continues with the structural improvements already successfully executed and adapts its production capacities to market demand. Two years ago, Siltronic has implemented a lead-site strategy enabling wafer production to be concentrated at single sites according to individual diameters. This allows for a flexible reaction on changing market trends. Discontinuing production at Siltronic’s Hikari site translates into optimized utilization rates at the company’s remaining 200 mm production facilities, higher fixed-cost coverage as well as economies of scale, resulting in a sustainably improved cost position.

“We are striving to mitigate effects on employees from the plant closure as much as we can”, says Dr. Christoph von Plotho, Siltronic’s Chief Executive Officer. According to von Plotho, Siltronic plans to offer its Hikari staff severance packages as well as consultancy and support in their search for a new employment outside the company. “At the same time, we are working hard to reap the earnings benefits resulting from this step as fast as possible”, von Plotho continued.

About Siltronic

Siltronic is a global leader in the market for hyperpure silicon wafers and a partner to many top-tier chip manufacturers. Wacker Chemie AG’s semiconductor division operates production facilities in Europe, Asia and the USA. Siltronic develops and manufactures wafers with diameters of up to 300 mm. Silicon wafers form the basis of the modern micro and nanoelectronics. They are used, for instance, in computers, smartphones, flat-panel displays, navigation systems, automotive engine control systems and many other applications.

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