Micron Tech to cut up to 2,000 more jobs in Idaho

Monday, February 23, 2009
By JOHN MILLER, Associated Press Writer

BOISE, Idaho —  Just two months after saying more local job cuts weren't expected, computer chip maker Micron Technology Inc. announced it will slash as many as 2,000 workers by the end of August and phase out certain manufacturing operations at its Boise, Idaho facility, amid the weak economy and lower demand for its DRAM memory chips.

The company said late Monday it will end manufacturing of DRAMs on 200-millimeter wafers in Boise, cutting 500 jobs in the near term. The 200-millimeter wafers are being shelved in favor of 300-millimeter wafer plants, which are more cost-effective.

Micron makes DRAM, or dynamic random access memory, a type of memory chip that has suffered in the last two years from oversupply and pricing pressure on chips used in personal computers and the slumping automobile industry. Its rivals also are hurting. South Korea's Hynix Semiconductor has posted five consecutive quarterly losses, including nearly $1 billion in the three months ending Dec. 31, while German memory-chip maker Qimonda AG filed for bankruptcy protection in January.

Hynix has said DRAM prices dropped 43 percent from the third quarter.

Micron's latest cuts come on top of a 15 percent companywide layoff announced last October, in which it eliminated about 3,000 of its 19,000 total positions. About 1,500 of those were in Boise, as it shut down the NAND flash memory plant it operated as part of a joint venture with Intel Corp.

Now, Micron will employ just over 5,000 people in the state, down from more than 10,000 two years ago. Once Idaho's largest private employer, it will trail St. Luke's hospitals and Wal-Mart Stores Inc., which have some 7,500 workers here.

The latest action will cost Micron about $50 million, but is expected to generate annual cash savings of about $150 million.

Micron plans to keep its 300mm research and development fabrication facility at its site in the desert near Boise, where it does product design and support, quality control and also has corporate and general services offices.

Spokesman Dan Francisco called those vital services for the company.

He said the 200mm wafer manufacturing facilities being shuttered will be kept in a "warm-down state" and could eventually be used for additional, unspecified manufacturing activities. The company doesn't expects the moves will result in any disruption in product supply to customers.

"We remained hopeful that the demand for these products would stabilize in the marketplace and start to improve as we moved into the spring. 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," said Steve Appleton, Micron chairman and chief executive, in a statement.

Addressing shareholders in December 2008, Appleton had said Micron would continue to evaluate staffing levels as dictated by the market, but didn't foresee more staffing cuts in Boise.

In response to the layoffs, Gov. C.L. "Butch" Otter ordered employees at the state Department of Labor to extend their hours in the Boise area, to help those affected.

"All of state government stands ready to assist people facing the challenges of unemployment, job training and placement needs," Otter said in a statement.

The state has already seen its unemployment rate more than double, to 6.6 percent in the past year, with the expectation that it will exceed 7 percent within months. The Micron announcement could accelerate that, at a time when 48,000 unemployed workers in Idaho already received $12.8 million in regular and federal extended benefits last week.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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