NEC to suspend chip production in UK

NEC to suspend chip production in UK

NEC will temporarily close down its UK chip plant in April 2002, the company announced Tuesday. The decision was made because of sluggish demand in the European mobile phone market, a statement from the company said.

All 1,260 employees at the plant will be laid off and the company will decide whether to reopen the plant based upon future market trends, the statement said.

NEC Semiconductors UK (NECSUK), founded in Livingston, Scotland in 1981, had been in the process of shifting its production from DRAM (dynamic RAM) to more profitable system LSI (large-scale integrated circuits), as part of a restructuring plan announced in July.

The company was unable to recover from a drop in its capacity utilisation rate caused by poor demand for mobile phone-related system LSI chips in the European market, and so the decision was made to suspend production at NECSUK, the statement said.

In response to the downturn in the semiconductor industry, NEC has been slimming down its semiconductor manufacturing operations. The company has already withdrawn from DRAM production in the US and suspended a few production lines in Japan.

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