News

20 January 2009

 

ASM International cutting 200 jobs in Almere

On 9 January, equipment and materials maker ASM International N.V. (ASMI) of Almere, The Netherlands announced plans to restructure ASM Europe (ASME) by transferring the remaining manufacturing and operational procurement activities for the vertical furnace product line over the next 12 months from Almere to the firm’s front-end manufacturing operations in Singapore (FEMS), and cutting ASME staffing in Almere by about 200. 

The remaining ASME workforce of about 350 will concentrate on vertical furnace R&D, vertical furnace product management, and regional sales & service activities for all front-end products. “ASMI will maintain a strong, highly skilled technology workforce at Almere, underscoring our commitment to retaining a strong base in the Netherlands,” stresses president & CEO Chuck del Prado.

ASMI expects the proposed measures to have a positive impact on front-end gross margins and to lower the operating break-even level for vertical furnaces by at least 30% (cutting vertical furnace costs by about €7m in 2009). Reorganization charges of €25-30m are expected to be recorded, mainly in 2009, including about €6m in non-cash fixed asset impairment charges.         

“Lowered capacity utilization at our FEMS facility - the result of deteriorating global economic and industry conditions, today allows us to execute several steps in our ‘April 2008 Roadmap to Front-end Profitability’ simultaneously and to accelerate our roadmap,” says del Prado.

Five years ago, ASMI established FEMS as its low-cost manufacturing hub for front-end production in Singapore. The transfer of manufacturing was planned in three stages. Phase 1 includes the transfer of the manufacturing of generic parts and subassemblies (about 70% of the cost of goods sold) for all products: completed by December for three core product groups (vertical furnaces, epitaxy and PECVD) and now starting for its Transistor Products ALD components. The firm is using the current conditions of low production volumes to initiate the next step involving the transfer of vertical furnace final assembly & testing, concurrent with completing Phase 1 for the remaining product categories.

The new measures should lead to a leaner and more focused, cost-competitive front-end operation, capable of generating higher gross margins with a structurally lower cost base, concludes del Prado.

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