Siemens holds back expansion

Productivity gains at Siemens’ semiconductor wafer fabrication plant in North Tyneside have cast fresh doubts over the planned £300,000 phase-two investment for a second production hall. So far Siemens has put £800,000 into the plant, opened in May last year with the creation of 1,000 jobs. But the addition of a second production hall bringing […]

Productivity gains at Siemens’ semiconductor wafer fabrication plant in North Tyneside have cast fresh doubts over the planned £300,000 phase-two investment for a second production hall.

So far Siemens has put £800,000 into the plant, opened in May last year with the creation of 1,000 jobs.

But the addition of a second production hall bringing the total investment to £1.1bn is still on hold.

‘There are no plans for further expansion at present. That is partly because of the state of the market, partly because of current output levels,’ said Siemens chief executive Alan Wood this week.

World prices for 16Mb D-RAM chips slumped from $6 in mid-1997 to just $2.50 this spring. Any extension in capacity will now hinge on recovery of the market.

But the need for further investment may not arise because of higher-than-planned levels of productivity, achieved by using Standard Mechanical Interface, or SMIF, manufacturing.

This involves fabricating silicon wafers in hermetically sealed pods, obviating the need for extensive clean-room technologies.

* Siemens has denied recent reports that Bosch-Siemens is planning to site a white goods plant in the UK.

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