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NEC is to axe 600 jobs at its Scottish chip plant due to the flaccid DRAM market.

The layoffs, due to take effect by the end of the year, affect around 40 per cent of NEC's workforce at the facility in West Lothian.

NEC also plans to chop monthly production capacity at the plant in half - to 15,000 eight-inch wafers per month by the end of 2001.

The move will speed up NEC's previously announced plans to pull out of the DRAM market.

The job cuts are also part of a wider move at the Japanese chipmaker. Today it said it would reduce its semiconductor workforce by 4,000 worldwide due to "the continued severe global turndown" in the chip market. This will include 2,200 contract staff.

It has also frozen its planned 20 billion yen investment to up production capacity of 8-inch wafers at its Shanghai affiliate, Shanghai Hua Hong NEC Electronics.

Hideto Goto, NEC Semiconductors MD, said he "deeply regretted" the layoffs in Scotland, where the company has operated for 20 years.

"However, the current global semiconductor trading situation is widely considered to be the worst ever encountered by the industry and I see no indication of any real upturn in the foreseeable future," he said.

The company has approximately 150,000 staff worldwide. ®

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