This follows ST's recent move to exit the flash business, by forming a new and independent joint memory venture with Intel Corp. In that move, ST also reduced its workforce by about 4,000 jobs. ST also shifted some memory fabs over to the venture in an apparent move towards a ''fab lite'' model.

Over the next two to three years -- after all products manufactured at these sites are re-qualified at other facilities -- ST said it will wind down operations at its older 6-inch wafer fab in Carrollton, Texas, its aging 8-inch fab in Phoenix, Arizona and its back-end packaging and test facility in Ain Sebaa, Morocco.

With the moves, ST will no longer have manufacturing in the U.S., according to a spokesman.

These measures follow the completion of a program to migrate most of ST's global 6-inch wafer production to less-expensive 6-inch plants in Singapore or 8-inch facilities worldwide. The moves are said to save $150 million a year.

In addition, ST's R&D venture, the Crolles2 Alliance, will complete the development of 45-nm CMOS process technology during 2007, but there would then be a "discontinuation" in the role of the Crolles development center and pilot fab.

Carlo Bozotti, president and CEO of ST, said the moves are intended to cut costs. ''Growing revenue is important, but we're also committed to improving our cost structure by reducing the number of our manufacturing sites and, as a result, trimming excess capacity and lowering manufacturing overhead,'' he said in a statement.

ST estimates these moves will involve approximately 4000 employees worldwide. The company expects to offer transfers or transition-based incentives to most of those involved.

ST expects these measures to generate approximately $150 million per year in savings in the cost of goods sold. The related pre-tax impairment and restructuring charges are expected to be in the range of $270 million to $300 million, including approximately $250 million in cash charges.

By: DocMemory
Copyright © 2023 CST, Inc. All Rights Reserved