MEMC reduces wafer capacity, cuts workforce

Oversupply and lower prices have resulted in a major restructuring for MEMC Electronic Materials

12/09/2011

Silicon wafer producer MEMC Electronic Materials has announced a restructuring plan that includes the elimination of 1,300 jobs, reduction of production capacity at its Portland, Ore., plant, and the idling of another facility in Italy.

About 250 of the job cuts will be in the United States. Forty-one percent of the job reductions will be in its semiconductor materials segment, while 47 percent will be in its solar management segment.

The company, based in St. Peters, Mo., will idle its Merano, Italy polysilicon facility, which has an annual capacity of up to 6,000 metric tons. It may close the facility unless dramatic feedstock, power, and other cost reductions are achieved in the near term.

To lower costs and align production with current market conditions, the company will reduce production capacity at its Portland, Oregon crystal facility and limit the ramp up of its facility in Kuching, Malaysia.

MEMC also said it will consolidate its Solar Materials and SunEdison business units into a single Solar Energy business unit, effective January 1, 2012.

The restructuring will cut operating expenses by more than 15 percent, according to the company.

MEMC CEO Ahmad Chatila said the moves by the company will position the company for more profitable growth in its core businesses of semiconductor wafers and solar energy systems.

“Changed market conditions require that we improve productivity across all segments and in solar move to a more balanced manufacturing model aligned with our downstream business,” he said.

Wafer demand has been weak this year because of a sluggish economy and overall slow growth in demand for semiconductors and solar panels. Weak demand has resulted in a glut of polysilicon in the market and lower prices.