San Jose, California-based Cypress Semiconductor Corp has announced plans for a major restructuring, eliminating over 300 jobs, and shutting down a wafer fabrication plant,a move that will see it take an $85.5m charge in its next quarter. Cypress warned at the end of last year that it wouldn’t make revenue expectations for 1997 (CI No 3,312), and sure enough the company barely broke even. Now Cypress is anticipating a revenue drop of between 4% and 9% from last quarter’s $134m and earnings per share are expected to show a loss in the $0.06-$0.08 range. Cypress blamed the general industry slump, saying that its revenues peaked during the third and fourth quarter of 1995 in the $170m range, and since then have kept below that level despite soaring unit demand, now in excess of a quarter-billion units a year of RAM, PROM and specialty memories, programmable logic devices, data communications products, timing devices and USB microcontrollers. It says the restructuring has been made possible by the improved efficiency of its new 0.35 and 0.25 micron technologies. Cypress will shut down its Fab 3 six-inch, 0.6 micron wafer fabrication plant in Bloomington, Minnesota and will move all production to Fab 4, its neighboring eight-inch, 0.35 micron fab. Its Round Rock, Texas-based Fab 2 facility will also be downsized. Cypress will cease production of SRAM static memory at the plant, which it says will reduce the manufacturing costs on its other high margin, non-SRAM products. SRAMs currently account for over 40% of Cypress’ revenues. It’s also shutting down its test plant in Thailand, transferring the work to its fully automated Manila plant. 100 jobs will go in Texas, and 570 subcontractor jobs in Thailand will also go, while 250 new jobs will be added at the more efficient Manila plant. Cypress is going ahead with a new Texas-based eight-inch facility, Fab 5, and will upgrade its San Jose-based Fab 1 plant to eight inches in order to maintain compatibility.
