Royal Philips Electronics has announced plans to close its semiconductor fabrication operations in Albuquerque, New Mexico at the end of 2003.
The announcement follows Philips' stated intention in September to reduce manufacturing capacity at Philips Semiconductors, and will be part of earlier announced restructuring plans for the fourth quarter of this year.
The closure will lower excess capacity and fixed costs, in order to reduce the structural break-even level, and better adjust capacity in line with demand.
The core production team will remain in place into the third quarter of 2003, at which time manufacturing will be relocated to other Philips sites in North America, Asia and Europe.
"This decision to close the Albuquerque fab was made to reduce the semiconductor division's overall wafer capacity. We are very sensitive to the impact of this decision on our employees in Albuquerque, and to the local community,” Philips North America Manufacturing senior VP Steve Kelley said.
“Over the coming months, we will work closely with our employees and local leaders to minimize the negative impact of this decision locally".
The Albuquerque fab was constructed in 1980-81 with the first chips coming off the line in 1982.
The fab was built by Philips, and operated under the Signetics brand name until 1992.