标签: layoff

When two chip makers gave out walking papers a few ago, fears about a wave of successive layoffs by semiconductor firms grew. AMD announced it would cut about 10 percent of its workforce , roughly 1,400 jobs. Spansion—the NOR flash memory vendor that, ironically, was once an AMD subsidiary—said it would ax about 660 jobs , or around 20 percent of its workforce. These actions have led many people to question—with some trepidation—whether we have entered that period in a semiconductor industry down cycle when fear and the herd mentality both set in, leading to layoffs at many firms. Recall that in the dark days of late 2008 and early 2009, it seemed as though not a day went by when we didn't learn of plans by at least one but often several chip companies to cut back, putting more people out of work. Some companies enacted multiple rounds of layoffs, owing to the steepness of the downturn. There seems legitimate reason to hope that things will be different this time around. For one thing, opinion is near universal that the bump in the road the semiconductor industry has been in for the past few months is a pimple on a dog's behind compared to the financial crisis/global recession Armageddon of 2008/2009. Some analysts, including Christopher Danely of JP Morgan, believe that this downturn has already bottomed out and that the semiconductor industry is in the early stages of an upturn. "I don't think there will be a lot more layoffs like at AMD," said Bill McClean, president of market research firm IC Insights. "We have recently seen quotes from TSMC, ST, Microchip, and UMC that sales appear to be forming a bottom and inventory adjustment is almost over. If things do not get a lot worse, I believe companies will hold tight to see how next year progresses." TSMC's top European executive said last week that the foundry giant was starting to see a positive turnaround in business. Carlo Bozotti, STMicroelectronics CEO, was quoted in a Marketwatch report saying that chip orders had likely reached the bottom for the cycle. The glass half full read on the AMD and Spansion layoffs is that they were very company specific actions that aren't likely to translate into layoffs at other firms. AMD, of course, is in the midst of some pretty serious transformation and has a new CEO who no doubt was interested in making a statement about where the company is headed and how it would control costs to get it there. In-Stat analyst Jim McGregor chalked it up to a long-overdue house-cleaning at a company that continued hiring all last year, put in place like a stamp by new CEO Rory Read. Of course, the cynical read on the AMD layoff is that AMD is doing in a very bold-faced way what many companies have been doing, often more subtly, for years—clearing the decks of U.S. engineers in order to make room for new ones in emerging economies. The company said 50 percent of the cuts would come in North America; an anonymous sources at the company said AMD would be making cuts in some areas in order to hire engineers and staff in areas of larger growth opportunity. That sounds an awful lot like corporate speak for "We want fewer engineers in the U.S. and more in China and India." Spansion's layoff was pretty straightforward. The bulk of the job cuts at Spansion (610 out of 750) will come from the closure of the company's test and assembly facility in Kuala Lumpur. Spansion is consolidating all of its test and assembly activities to one facility outside of Bangkok in order to save some cash. But the timing of Spansion's announcement is ironic to say the least. Though the rampant flooding in Thailand in recent months has not effected Spansion's operation there, it has certainly underscored the value of maintaining manufacturing activities in multiple locations. ON Semiconductor, among other firms, has been forced to endure the closure of two of its facilities in Thailand and expects that to impact it's top line revenue by about $60 million in the fourth quarter. ON Semi and others say they are re-routing products to other facilities for test and assembly in order to lessen the impact on customers and availability of product. But what if you don't have another facility to re-route product to? From a cost-analysis point of view, onsolidating test and assembly operations in one site to save about $30 million on an annualized basis might seem a shrewd cost-cutting move, until your single consolidated test and assembly operation is hit by a natural or man-made disaster and forced to shut down. Then where do you send your product? (For the record, we certainly hope that Spansion is never faced with this prospect, but we've had plenty of examples this year to remind us that these things do happen.) Asked these questions, a spokesman for Spansion said the company's manufacturing strategy makes use of both internal assets (internal fabs and the Bangkok test and assembly facility) and external resources (foundries and third-party SATS providers). "As we shift our internal test and assembly capacity to Bangkok, we continue to use external partners, such as Amkor, ChipMos and UTL to supplement our internal operations and provide additional, flexible capacity," the spokesman said. "We don't anticipate any additional risk from this consolidation activity." Dylan McGrath EE Times