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Fujitsu to close Oregon Flash plant

AMD dismisses investment offer

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Fujitsu's Gresham, Oregon memory plant is to close, with the loss of 670 jobs, early next year, the chip maker announced yesterday as it began notifying workers that their services would no longer be required.

Production will cease at the end of January 2002 and the plant will close shortly afterward. Fujitsu hopes to sell it off.

The Gresham facility, built in 1988, was switched to Flash memory production last year on the back of rising demand for non-volatile memory from the cellphone market. The collapse of the cellular handset business this year hit the plant's production hard.

Fujitsu scaled production back last July, from 60 per cent of capacity to just 10-20 per cent.

In a bid to prevent the closure of the facility, Fujitsu attempted to persuade AMD to invest in the plant - having already denied it was selling the factory to the Intel rival. The two companies already share a Flash memory plant in Japan - to which, incidentally, Gresham's remaining orders will be transferred - but with no sign of recovery in the Flash market before Q3 2003, AMD decided such an investment would not be in its best interests.

AMD lost $187 million during its most recently completed quarter.

Fujitsu itself is expected to spend ¥350 billion ($2.828 million) cutting 20,900 jobs (including the Gresham 670) and restructuring its business, primarily its semiconductor operation. That will lead to a ¥310 billion loss for the company's current fiscal year, which ends 30 March 2002. The Japanese giant would not say how much the closure of the Gresham plant would cost it. ®

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