ON Semiconductor announces Aizu plant closure

Chip giant ON Semiconductor has announced plans to close its wafer manufacturing facility in Aizu, Japan by June 2012 in a move designed to help the company concentrate on more advanced technologies.

The Aizu facility, one of nine manufacturing plants currently owned by the company, is responsible for the creation of six-inch wafers used to create high-volate integrated circuits and power management devices. The smaller size wafers, however, are being phased out by the company as it makes the move to more efficient eight-inch plants.

While it would be possible to retool the Aizu facility for larger wafer sizes, that's something ON Semiconductor has decided against - and the company has confirmed that the Aizu plant isn't going to be the only closure.

"It is vital to the growth of the company that our manufacturing technologies keep pace with the advancing needs of our customers, and that our operations remain competitive," claimed president Keith Jackson. "The Aizu facility and its dedicated employees have been a valuable asset to the company, producing quality products.

"The six-inch Aizu fab, however, is among our smaller volume wafer manufacturing facilities and the products we manufacture there can be produced at other fabs – including some eight-inch production facilities – that will provide better long term manufacturing efficiencies," he concluded.

Described by the company's chief operating officer John Nelson as "another step forward in the company's transformation of its manufacturing network," the Aizu closer will be followed by consolidation of Sanyo's Japan-based manufacturing operations to reduce ON Semiconductor's manufacturing footprint from its current nine sites to just six.

"Yet, with the consolidations and expansion investments we have underway, we expect that our available production capacity in 2013 will be greater than our current capacity," Nelson claimed during the closure announcement. "Additionally, our manufacturing infrastructure will enable us to continue to expand to meet our customers' needs."

The closure of the Aizu plant will result in the loss of 197 full-time positions and a further 94 contract jobs and will cost ON Semiconductor an estimated $20 to $25 million for annual savings of around $8 million.