A question mark hangs over the future of the activity of Micron Technology Inc. (MU) in Israel. The company, which has had a presence in Israel since buying Numonix in February 2010, and thereby acquiring a fab in Kiryat Gat that formerly belonged to Intel (Fab 18), has in recent weeks been considering its strategy for 2013, and the possibility of terminating its activity in Israel is on the agenda.
These changes may include extensive layoffs, of perhaps several hundred employees. Micron currently employs about 1,300 people in Israel. The local activity is run by general manager Jonathan Wand.
Micron would not comment on the report.
These layoffs will follow similar moves at other companies in the local hardware industry recently. Freescale and ECI have already announced that they are dismissing hundreds of employees.
When Micron acquired the Kiryat Gat fab two years ago, the company's message was that no significant changes or layoffs would be carried out there.
In the past two years, however, significant changes have occurred at Micron. Its market cap has been eroded, sales have fallen, it posted a loss last year, and its long-term debt continued to pile up. The company's CEO Steve Appleton was killed in a plane crash early this year, and he was replaced by Mark Durcan.
In November, a senior Micron manager visited Israel, and in talks with local managers said that changes were in the offing in the company's activity here. It is hard to estimate how substantial the changes will be. The picture should become clearer by the end of the year. It could be a matter of hundreds of layoffs, or the scrapping or sale of the business in Israel.
The Kiryat Gat fab is considered to be an advanced facility, having been upgraded to production with 45 nanometer technology, and the know-how of the production workers is no trivial matter. It therefore seems probable that the fab will continue to operate in some format, even if Micron decides against maintaining its activity.
Published by Globes [online], Israel business news - www.globes-online.com - on December 11, 2012
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