Fujitsu is cutting output at its semiconductor plant in County Durham and switching production to a more sophisticated microchip to combat a downturn in the market for memory products.
The decision follows the collapse of the DRam (Dynamic Random Access Memory) market. Average prices of 16MB DRams have fallen 95% in the past three years from £33 to £1. The market is suffering from overcapacity.
The Japanese company would not specify by how much it is cutting output at the Newton Aycliffe plant. All 600 workers will take extended holiday leave this month as part of the production cutbacks.
During this period equipment will be installed for the production of logic chips which will be ramped up over the next 12 months. These are more complex and customer specific than the DRam chips so far produced by the plant.
Fujitsu’s decision follows hot on the heels of the announcement that German electronics firm Siemens is to close its £1.1bn Tyneside semiconductor plant next January. It blames the closure on the slump in the market for memory chips and general overcapacity in the sector.
The government taskforce set up to find a buyer for the Siemens’ plant said this week it was ‘cautiously optimistic’ about saving the 1,100 jobs at the plant.
‘There has been an excellent response to the prospectus sent out last week to potential interested parties,’ said the spokeswoman for the government office for the north-east. She added that it would take some time to find a buyer.