Fairchild Semiconductor will close its West Jordan facility in an effort to cut costs and restructure its supply chain, the company announced Monday.
A spokesman for the San Jose, Calif.-based chipmaker would not reveal how many people are employed at the West Jordan facility, but the company is cutting about 1,350 jobs worldwide as it closes facilities in West Jordan, Malaysia and South Korea. The closures, which will happen between the second and fourth quarters 2015, amount to 15 percent of Fairchild’s 9,000-person workforce.
Employees in West Jordan were informed last week of the closure. Some employees may be offered positions within the company, but many will receive a compensation package and be out of a job, said Fairchild spokesman Bruce Fienberg.
"Our employees are important to us, of course, which is why we made sure our employees were notified in person prior to the announcement being made public," Fienberg said.
The closures are expected to save the company between $45 million and $55 million annually.
The move comes as the company shifts from manufacturing 5- and 6-inch wafers to 8-inch silicon wafers, which are more powerful and efficient. Rather than retool the smaller wafer facilities to produce 8-inch wafers, Fairchild opted to close the facilities entirely.
"The board decided, after a lot of discussion, that it was going to be overall more cost effective and better for the supply chain by shutting those lines," Fienberg said.
Fairchild is also boosting its use of outside contractors, mirroring an industrywide trend, Fienberg said.
Fairchild will continue to operate its facilities in Maine, Pennsylvania, South Korea, the Philippines and China. The company’s shares fell 10 cents to $16.92 by late Monday. The stock, which trades as FCS on NASDAQ, has climbed more than $4.50 in the last 12 months.
The Associated Press contributed to this report.
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