Due to deteriorating economic conditions and decreased demand for old-generation DRAM products Micron Technology has announced that it would phase out 200mm wafer manufacturing operations at the company’s Boise Idaho facility. This action will reduce employment at Micron’s Idaho sites by approximately 500 employees in the near term and as many as 2000 positions by the end of the company’s fiscal year.

“We remained hopeful that the demand for these products would stabilize in the marketplace and start to improve as we moved into the spring. Unfortunately, a better environment has not materialized, and we are at a point where we wanted to let our employees and the community know in advance what will occur later this summer,” said Steve Appleton, Micron chairman and chief executive.

Since 200mm wafers are no longer used for manufacturing of high-end products, Micron utilized the facility to make so-called “200mm specialty” dynamic random access memory products, which most likely means that memory products and types made at the fab were outdated.

The company will continue to operate its 300mm research and development fabrication facility at the Boise site and perform a variety of other activities, including reticle manufacturing, product design and support, quality assurance, systems integration and related manufacturing, corporate and general services. These workforce changes were not anticipated or included in Micron’s earlier 15% global workforce reduction announcement last October. Following these changes, Micron will employ more than 5000 in the state.

The company said that it has sufficient manufacturing capacity remaining and does not expect any disruption in product supply required for customer needs.

Cash restructuring charges will be approximately $50 million, which will generate a gross annualized operating cash benefit of $150 million. The net operating cash flow effect will be neutral for fiscal year 2009.

Micron is committed to assisting employees affected by the workforce reductions and is providing severance and outplacement services.

Tags: Micron