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News

25 June 2007

 

Filtronic to cut 115 jobs as RFMD decides to cease buying GaAs pHEMT switches in September

Microwave subsystem and component maker Filtronic plc of Shipley, UK says that its ‘predominant customer’ has advised it that its requirement for GaAs pHEMT-based switches from Filtronic will cease in September because of their decision to in-source all production. 

This will substantially reduce the level of activity for Filtronic’s Compound Semiconductor business at its 6” GaAs RFIC fab in Newton Aycliffe, County Durham UK, the firm says, so its board has decided to reduce the size of the business accordingly. Consultations will start with affected staff over proposed job losses involving about 115 people.

Early last year, Filtronic announced a £45m capital expenditure program to triple capacity at its ompound semiconductors division. However, in June 2006, after weaker-than-expected demand for its products (due largely to its main customer RFMD increasing in-house production of pHEMT switches for mobile phone handsets) and half-year losses of £6.7m, this was reduced to £15m. Then, this January, the investment was reduced again to ‘not exceeding £10m’ (including contract cancellation charges of £7m), as its switch production capacity would be aligned with the projected requirements of its concentrated customer base. 

However, subsequently, in May, The Northern Echo newspaper in north-east England reported that Filtronic was cutting staffing levels by 31 following a review of its business, blaming “continuing uncertainty in the mobile handset market” and saying that it needed to assess its operation to gain a “more considered understanding of what is needed at the plant”. Unfortunately, the latest news means that the number of job cuts is worse than expected in May.

Filtronic says that its board is considering a full range of possibilities for the ongoing operation (of the Newton Aycliffe GaAs fab), including sale. (The fab was formerly a Fujitsu DRAM silicon fab before being acquired by Filtronic in 1999.) However, Filtronic has reaffirmed its objective of running the Compound Semiconductor business on at least a cash-neutral basis.  

See related items:

UK government grants £3m to develop GaN LEDs on 6” silicon for low-cost solid-state lighting

Filtronic confirms cut in compound semi capex due to lower-than-expected demand

Filtronic shaves around £5m off expansion plan

Visit Filtronic: http://www.filtronic.com

See Northern Echo story