ON Semiconductor moves on to Malaysia
ON Semiconductor moves on to Malaysia
Date: Friday, February 06, 2009 12:57 AM
<<<<< JOB DESTRUCTION NEWSLETTER No. 1975 -- 2/05/2009 >>>>>
ON Semiconductor just announced that they will close down their Phoenix,
Arizona fab. The fab will be moved to Malaysia. CEO Keith Jackson said that
the company will save $36 million a year by moving to Malaysia.
ON is also closing a facility in Pocatello, Idaho. In December 2007 Pocatello-
based AMI Semiconductor was bought out by ON Semiconductor. As soon as the
buyout was finalized about 60 AMI executives were sacked. Since early 2008
employees have coninued to get whacked.
ON Semiconductor was a spinoff from Motorola who dumped all of their Arizona
semiconductor fabs in order to move production to China. ON and Freescale is
about all that was left of Arizona's Motorola semiconductor business. Motorola
used to be the #1 employer in Arizona. That spot is now held by Walmart.
REFERENCES
http://www.azcentral.com/community/chandler/articles/2009/02/05/20090205biz-onsemi0205-CP.html
ON to close Phoenix plant, Chandler site safe
http://www.kpvi.com/global/story.asp?s=9634687
ON Semiconductor To Close Pocatello's Fab. 9 Sooner Than Expected Be sure to
watch video linked on right side
http://www.electronicsweekly.com/Articles/2009/01/12/45247/on-semi-lays-off-1500-closes-plants-forces-unpaid-time-off.htm
ON Semi lays off 1500, closes plants, forces unpaid time off
http://www.idahobusiness.net/archive.htm/2009/01/08/ON-Semiconductor-to-close-1-Pocatello-fab-center
ON Semiconductor to close 1 Pocatello fab center
http://www.kpvi.com/Global/story.asp?s=8030890
AMI-S Changes to ON Semiconductor
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http://www.azcentral.com/community/chandler/articles/2009/02/05/20090205biz-onsemi0205-CP.html
ON to close Phoenix plant, Chandler site safe
3 commentsby Andrew Johnson - Feb. 5, 2009 12:00 AM The Arizona Republic ON
Semiconductor Corp.'s manufacturing presence in metro Phoenix will be nil by
next year, when the chipmaker will close its remaining Valley fabrication
plant.
The semiconductor manufacturer on Wednesday said that it will close the
facility, which makes filters, diodes, rectifiers and transistors for
electronic devices, by the end of the first quarter of 2010. Its other
fabrication plant in Phoenix closed last year.
The announced closure eliminates 350 manufacturing jobs in metro Phoenix.
Production will be moved to ON's plant in Malaysia.
ON currently employs about 1,100 workers in the Phoenix area, including the
workers affected by the announcement.
The company also operates an engineering and design center in Chandler.
That facility and ON's corporate headquarters in Phoenix are not affected.
In an earnings conference call with analysts on Wednesday, Keith Jackson,
president and chief executive officer, said that the plant closure would
result in a cash charge of $8 million to $10 million but eventually will
result in annual savings of $36 million.
For the fourth quarter that ended Dec. 31, ON reported a net loss of $519.6
million, or $1.27 per diluted share, compared with a profit of $61.1 million,
or 20 cents per diluted share, in the same period a year ago.
The Phoenix plant, which has been in operation since the 1960s and makes chips
on six-inch wafers, is located at ON's corporate headquarters, 5005 E.
McDowell Road.
ON is one of several semiconductor manufacturers to close plants and reduce
headcount amid plummeting chip sales, as the recession hampers demand for
consumer electronics, mobile phones, automobiles, home appliances and other
products that contain the chips.
Annual semiconductor sales fell in 2008 for the first time in seven years.
Industry analysts expect sales to continue declining this year.
ON's fourth-quarter sales actually increased 19.8 percent year-over-year, to
$488.7 million. However, they decreased 16 percent from the third quarter.
"The end of 2008 and the beginning of 2009 have been a challenging time for
the semiconductor industry . . . and we are expecting further declines in the
first quarter 2009," Jackson said. "We are uncertain as to the depth or
duration of the current recession."
ON's shares closed up 22 cents, or 5.4 percent, to $4.27 Wednesday.
The sluggish environment is prompting manufacturers to shutter aging
facilities in favor of newer U.S. plants and fabrication plants overseas where
labor and other manufacturing costs are lower.
Last month, ON said it planned to lay off 1,500 workers across the company
during the year, cut merit increases and require employees to take a two-week
unpaid furlough.
ON also said it was accelerating three previously announced plant closures
this year - two in Slovakia and one in Idaho - and close a fourth plant.
The fourth plant turned out to be the Phoenix facility.
The closures are partly the result of two acquisitions ON made in 2008,
spokeswoman Anne Spitza said.
After the four plant closures, ON will have 10 fabs around the world. The
company currently has about 14,500 employees worldwide.
Several other semiconductor manufacturers with Arizona operations have
announced layoffs, salary cuts and furloughs in recent weeks, including Intel
Corp., Texas Instruments Inc., Freescale Semiconductor Inc., Microchip
Technology Inc. and STMicroelectronics.
Market analysts and trade groups are hopeful President Barack Obama's proposed
stimulus plan of $900 billion, which includes several billions of dollars for
infrastructure projects, could give the semiconductor industry a much-needed
boost.
Reach the reporter at andrew.johnson@arizonarepublic.com or 602-444-8280.
Read his blog at innovation.azcentral.com.
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http://www.kpvi.com/global/story.asp?s=9634687
ON Semiconductor To Close Pocatello's Fab. 9 Sooner Than Expected
Posted: Jan 7, 2009 04:24 PM MST
Reductions planned at ON Semiconductor in Pocatello for later this year could
happen sooner than expected.
ON Semiconductor announced today it is taking additional cost cutting measures
because of the economy.
Today On announced factory closures planned for the end of 2009, including
fab. 9 in Pocatello, will be brought forward to the middle of 2009.
ON will also be closing an additional location by the end of 2009. No other
specifics were mentioned.
The company will also shut down factories for 4 to 6 weeks in the first and
second quarter of 2009. According to corporate communications specialist,
Anne Spitza, On Semiconductor will determine which factories will be shut down
based on customers orders and other factors. Spitza could not comment on the
immediate future of Pocatello's facility in the first and second quarters.
There will be unpaid time off for both senior executives and other employees
and no annual raises or bonuses.
On also plans to cut its worldwide personnel workforce by ten percent or 1,500
people.
ON says they hope to reduce expenses so that they can reduce revenue
requirements and eventually "cash break even."
Here is the company's news release on today's reductions.
PHOENIX, Ariz. - Jan. 7, 2008 -ON Semiconductor Corporation (NASDAQ: ONNN)
today announced that it is taking additional cost reduction measures. In the
fourth quarter of 2008, the company began taking initial actions to reduce
overall spending levels. The actions included the reduction of 2009 planned
capital expenditures to $50 to $60 million from normalized yearly levels of
approximately $130 to $140 million, temporary site shutdowns during the fourth
quarter of 2008, a hiring freeze, the elimination of second half of 2008 bonus
payments and strict controls over all discretionary spending. The company is
also planning a series of additional permanent and temporary actions to reduce
its overall cost structure. These planned actions include:
Factory closures planned for the end of 2009 will be brought forward to the
middle of 2009 Evaluation of other front-end manufacturing locations are
ongoing with the objective of closing an additional location by the end of
2009 Factory shutdowns for 4 to 6 weeks in the first and second quarter of
2009 Three weeks of unpaid time off for senior executives in both the first
and second quarter of 2009 (Equates to an approximate 23 percent decrease in
base salary) Two weeks of unpaid time off or a 4 day work week (based upon
local legal
requirements) for other employees in both the first and second quarter of
2009 (Equates to an approximate 15 percent decrease in base salary) No annual
merit increases No bonus payments expected to be paid in 2009 A reduction in
worldwide personnel of approximately 1,500 which equates to a reduction of
approximately 10 percent of total payroll expenses
The combination of these and other actions the company is taking is expected
to reduce total fixed costs by approximately $40 to $50 million a quarter, of
which approximately $10 to $15 million will be from temporary actions. These
actions are expected to reduce operating expenses by approximately $20 million
from the third quarter of 2008 run-rates and exclude the operating expense
impact associated with the Catalyst Semiconductor acquisition which closed in
the fourth quarter of 2008. The company expects initial benefits from these
actions to start in the first quarter of 2009 and to increase throughout the
year. Once completed, these actions are expected to reduce the revenues
required for cash breakeven to approximately $340 million a quarter. To
execute these cost reduction actions, the company anticipates it will use
approximately $20 to $30 million of cash over the next 5 quarters and incur
restructuring and other charges, a portion of which will be recorded in the
fourth quarter of 2008.
The company also announced today that it is revising its fourth quarter
2008 outlook provided on its earnings release and conference call on Oct.
30, 2008. The company had previously guided fourth quarter 2008 revenues to be
approximately $500 to $550 million or down approximately 5 to 14 percent
sequentially from the third quarter of 2008. As a result of the continued
deterioration in the global economy, ON Semiconductor now anticipates fourth
quarter revenues to be approximately $480 to $490 million or down
approximately 16 to 17 percent sequentially from the third quarter of 2008.
Due to the timing of the availability of inventory and sales distribution
information from our distribution partners globally and ON Semiconductor's
related recognition of revenue on a sell-thru basis, the company will provide
full details on fourth quarter and 2008 annual results in its earnings release
to be scheduled during the first week of February.
"Our updated fourth quarter 2008 revenue outlook reflects the reduction in
demand we have experienced as a result of deteriorating conditions in the
global economy," said Keith Jackson, ON Semiconductor president and CEO.
"In the fourth quarter of 2008 we utilized approximately $49.4 million of cash
to repurchase $60.9 million of our zero coupon convertible senior subordinated
notes and still managed to grow our cash and cash equivalents balance by
around $30 million to approximately $450 million. Based on the limited
visibility we have for the first quarter of 2009, we anticipate another
challenging quarter for the semiconductor industry and the company with
revenues down more than normal seasonality. While we are hopeful that the
economy will improve as we move through 2009, we have and will continue to
examine our overall spending and are prepared to take additional actions to
ensure we remain competitive and are positioned to generate positive free cash
flow in this challenging environment."
In the fourth quarter of 2008, the company will also evaluate the carrying
value of its goodwill outstanding as of the end of the third quarter of 2008.
This is expected to result in a non-cash impairment charge to be recorded in
the fourth quarter of 2008 which will be described in further detail in our
earnings release and SEC filings.
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http://www.electronicsweekly.com/Articles/2009/01/12/45247/on-semi-lays-off-1500-closes-plants-forces-unpaid-time-off.htm
Friday 6 February 2009Components
Latest News |NewsletterAnalogue and Discretes ON Semi lays off 1500, closes
plants, forces unpaid time off by Suzanne Deffree, Managing Editor, News -
Electronic News Monday 12 January 2009 ON Semiconductor has announced severe
cuts to its workforce, capital expenditures, manufacturing operations, and
employee compensation that it expects will reduce total fixed costs by up to
$50 million a quarter and will help it navigate the continuingly challenging
economic climate.
The Phoenix-based power IC maker will layoff approximately 1,500 employees,
reducing total payroll expenses by approximately 10%, according to a statement
made Wednesday afternoon. The company is complementing that action by halting
annual merit increases and bonus payments on a temporary basis.
Senior executives will also take three weeks of unpaid time off in both Q1 and
Q2, which ON Semi estimated equates to an approximate 23% decrease in base
salary. Two weeks of unpaid time off or a four-day work week (based upon local
legal requirements) for other employees in both the quarters will also be
implemented. ON Semi estimated that action equates to an approximate 15%
decrease in base salary.
Further, ON Semi said it will enact factory shutdowns for four to six weeks in
Q1 and Q2. Factory closures planned for the end of 2009 will be brought
forward to the middle of the year, the company said. ON Semi in May 2008
confirmed plans to close two wafer manufacturing facilities located in
Piestany, Slovakia, laying off approximately 400 employees. Two months prior
to that, ON Semi confirmed plans to cut about 200 global employees and close a
Pocatello, Idaho, fab as it merged in AMI Semiconductor (AMIS) following its
$915 million acquisition.
ON Semi said this week that evaluation of other front-end manufacturing
locations are ongoing with the objective of closing an additional location by
the end of 2009.
The efforts announced follow cost-reduction measures ON Semi began taking in
Q4 2008, including the reduction of 2009 planned capital expenditures to $50
million to $60 million from normalized yearly levels of $130 million to $140
million, temporary site shutdowns during the quarter, a hiring freeze, the
elimination of second half 2008 bonus payments, and strict controls over all
discretionary spending.
All in all, the actions are expected to reduce total fixed costs by
approximately $40 million to $50 million a quarter, of which approximately $10
million to $15 million will be from temporary actions. ON Semi said the
actions are expected to reduce operating expenses by approximately $20 million
from Q3 2008 run-rates and exclude the operating expense impact associated
with the Catalyst Semiconductor acquisition, which closed in Q4.
That acquisition cost ON Semi $115 million and was first announced in July
2008.
The company expects initial benefits from the actions to start in the current
quarter and to increase throughout the year. Once completed, these actions are
expected to reduce the revenues required for cash breakeven to approximately
$340 million a quarter, ON Semi said, adding that it anticipates it will use
$20 million to $30 million of cash over the next five quarters and incur
restructuring and other charges as it executes the cost-reduction actions.
The company also lowered its Q4 guidance Wednesday. In its original forecast
made October 30, 3008, ON Semi had guided December quarter revenues to be $500
million to $550 million, or down approximately 5% to 14% sequentially. ON Semi
now anticipates Q4 revenues to be approximately $480 million to $490 million,
or down approximately 16% to 17% sequentially.
ON Semi is slated to provide full Q4 details the first week of February. ON
Semi noted that it recognizes revenue on a sell-thru basis, a method that, as
component distributors trim inventory stock, financial analysts have cautioned
on in recent weeks.
"Our updated fourth quarter 2008 revenue outlook reflects the reduction in
demand we have experienced as a result of deteriorating conditions in the
global economy," said Keith Jackson, ON Semi's president and CEO, in a
statement.
"In the fourth quarter of 2008, we utilized approximately $49.4 million of
cash to repurchase $60.9 million of our zero coupon convertible senior
subordinated notes and still managed to grow our cash and cash equivalents
balance by around $30 million to approximately $450 million.
"Based on the limited visibility we have for the first quarter of 2009, we
anticipate another challenging quarter for the semiconductor industry and the
company with revenues down more than normal seasonality," Jackson continued.
"While we are hopeful that the economy will improve as we move through 2009,
we have and will continue to examine our overall spending and are prepared to
take additional actions to ensure we remain competitive and are positioned to
generate positive free cash flow in this challenging environment."
By Suzanne Deffree, Managing Editor, News - Electronic News
See also: Credit Crunch: Semiconductor gloom amid economic gloom, in which
Electronics Weekly highlights some recent stories that detail the effect of
the economic downturn on the electronics industry.
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http://www.idahobusiness.net/archive.htm/2009/01/08/ON-Semiconductor-to-close-1-Pocatello-fab-center
ON Semiconductor to close 1 Pocatello fab center
Posted: Thursday, January 8, 2009
ON Semiconductor will shut down one of its two Pocatello microchip fabrication
centers earlier than originally planned this year as part of drastic cost-
cutting measures it announced on Jan. 7. At least 150 workers are employed in
Fab 9, the oldest of its two fabs in Pocatello, where ON is one of the city s
largest employers.
In December 2007, it was announced that Pocatello-based AMI Semiconductor had
reached an agreement to be acquired by Phoenix-based ON Semiconductor in a
buyout that was finalized in March 2008, when 50 to 60 Pocatello employees
were immediately laid off and most of AMI s top executives departed from what
had been its world headquarters.
At that time, AMIS employed about 900 locally. Since then, the number of
employees in its finance, legal, human resources and other local departments
has been sharply reduced, but its engineering and manufacturing departments
heretofore largely have been spared.
ON announced Jan. 7 that about 1,500 employees globally or about 10 percent of
its total payroll expenses will be eliminated this year, but it did not
indicate how many of those will be in Pocatello. Fab 9 was scheduled to be
closed by the end of this year, but its closure has been moved to mid-year.
Fab 10 is ON s newest fab in Pocatello and has been operating for about
12 years.
ON is evaluating front-end manufacturing locations with the objective of
closing an additional location by the end of 2009. It said there will be
factory shutdowns for four to six weeks in the first and second quarters of
2009, but did not designate where. ON also operates a fab at Greshem, Ore.
Other cost reductions announced by ON included six weeks of unpaid time off
for senior executives in the first half of 2009 or a 23 percent cut in base
salary, and four weeks of unpaid time off or a four-day work week for other
employees in the first half or about a 15 percent cut in pay.
There also will be no merit increases or bonus payments this year. ON expects
these and other actions will reduce total fixed costs by from $40 million to
$50 million a quarter of which $10 million to $15 million will be from
temporary actions. Operating expenses are expected to be cut by about $20
million.
ON Semiconductor President and CEO Keith Jackson said the company s updated
fourth quarter 2008 revenue outlook reflects a reduction in demand experienced
as a result of deteriorating conditions in the global economy.
"Based on the limited visibility we have for the first quarter of 2009, we
anticipate another challenging quarter for the semiconductor industry and the
company, with revenues down more than normal seasonality," Jackson said.
"While we are hopeful that the economy will improve as we move through 2009,
we have and will continue to examine our overall spending and are prepared to
take additional actions to ensure we remain competitive and are positioned to
generate positive free cash flow in the challenging environment."
In the fourth quarter of 2008, ON started to cut costs by reducing 2009
planned capital expenditures by $80 million to $50 million or $60 million
-- down from $130 million to $140 million. It also imposed temporary site
shutdowns during the fourth quarter, a hiring freeze, elimination of 2008
second half bonuses, and strict controls over all discretionary spending.
ON announced on Jan. 7 it anticipates fourth quarter revenues to run from $480
million to $490 million or down by 17 percent from the third quarter of 2008.
That is down from the $500 million to $550 million revenue projection made in
October.
ON s stock dropped 20 cents a share or nearly 5 percent on Jan. 7 to close at
$4.04. In the past 52 weeks, its value has ranged from a high of
$10.85 to a low of $2.35.
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http://www.kpvi.com/Global/story.asp?s=8030890
AMI-S Changes to ON Semiconductor
Posted: March 17, 2008 06:34 PM MST
AMI-S is now a part of ON Semiconductor - a company out of Phoenix, Arizona.
The deal could be very lucrative for stock holders of the former AMI-S, but
dozens of layoffs started today and will continue through next month. Aaron
Kunz spoke to the new boss of AMI-S employees.
According to ON CEO Keith Jackson, about 70 people who will be let go within
30 days. Beyond that, he says a whole section of the former AMI-S will be shut
down in a few years.
As AMI-S employees reported to work Monday, it was clear something big was
about to happen - a huge merger that dissolves AMI-S into ON Semiconductor, a
company out of Phoenix, Arizona that purchased AMI-S for $613-million.
The deal was a stock-for-stock merger that will give AMI-S shareholders
1.15 shares for every share of AMI-S stock they own.
According to Keith Jackson, it makes sense for the two companies to merge.
Keith Jackson: "It's going to give us a much stronger company to service those
customers and from a shareholder perspective a much stronger company from a
financial and cashflow perspective."
While Jackson is quick to point out the merger makes the former AMI-S a
better, more vibrant company in the long run, in the short term, layoffs are
needed to protect the business side of ON Semiconductor.
Keith Jackson: "So what we've done is looked across the two companies for
duplicate positions and started the process of eliminating those
duplications."
For now, 70 positions will be eliminated - mostly in the corporate level and
human resources. But more are expected over the next 30 days. In the long run,
Fab 9 will be closed within two years.
Keith Jackson: "That is correct. There is a facility in Pocatello they call
Fab 9 and that is targeted for closure."
But while the company is suffering layoffs today, Jackson says the overall
operation will continue to grow. Fab 10 will continue operation under new head
of site Bob Klausterbauer. ON says they will also add a few programs to the
Pocatello facility down the road.
Keith Jackson: "And so there is a very significant operation there in
Pocatello - not just for manufacturing, but also for developing and marketing
of products."
As far as donating money to area charities and programs, Jackson says there
should be no change.
Former AMI-S CEO Christine King announced today she will be a member of the
board of directors for ON Semiconductor effective immediately. Jackson says
she will likely live in Pocatello.
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