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Jun 30th, 2009
X-FAB to Close 6-Inch Production at Plymouth, UK Fab
Hi-tech firm's team at risk as orders fall; The future of semi-conductor manufacturer X-FAB's prized Plymouth factory was plunged into doubt last night as the firm warned it would close if not sold by the end of next year
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According to the Western Morning News (Plymouth), the German-owned firm has been grappling with shifting markets and yesterday announced that production of its smallest six-inch silicon wafers would cease after the final orders were received. That means up to 65 job losses by the end of August.

While staff have known for two years that the production line would ultimately stop, it was hoped that orders for its eight-inch wafers would increase enough to alleviate the job losses.

Yesterday, finance director Chris Bailey confirmed that orders for the larger model have "not increased sufficiently to require all the staff on site to be retained". "It's regrettable but we had to do this," he said.

All orders for the six-inch wafers will be filled by the end of August, when workers are expected to leave their jobs.

Mr Bailey said the expected job losses would fall across the business, including engineers and clerical staff. But the firm said the numbers and timescale for the redundancies may change if orders for either the six-inch or eight-inch wafers are received before late August.

The Roborough factory is one of five manufacturing sites owned by the German group for the production of analogue and digital integrated circuits. The Plymouth centre, which has 234 staff, makes bespoke semi-conductors for a range of applications, and is one of the region's hi-tech employers offering well paid jobs.

Two years ago, the company decided it would stop making its six-inch silicon wafers, used in medical and automotive technology, to concentrate on an eight-inch model because of "difficulties" maintaining both lines.

In September last year, it began a review of its future amid a "shift" in the focus on the technologies it manufacturers, from specialist low-volume to mainstream, high-volume in the mixed-signal area.

Mr Bailey said in September, at the time of the review, that the group was aiming to choose a new owner "to address what niche technologies might be the best course for the site".

Yesterday he said that unless a buyer was found soon the Plymouth factory would close.

"We have been looking within the industry and now we are looking outside the industry and we have got professional advisors helping us with this," he said. "We are looking to resolve it over the next few months, but if we don't find a buyer we will have to close at the end of 2010. At the moment all our efforts are going in to finding a buyer. It is an international search."

He added: "The current economic climate doesn't help. It is a fairly specialised kind of industry and there is a lot of consolidation going on."

X-FAB bought the Plymouth premises in 2003 from Zarlink Semiconductor. Much of its work comes from the car industry but it also supplies components for hearing aids and pacemakers. Sales are worldwide, with most in Europe and America.

Tim Jones, chairman of the Devon and Cornwall Business Council, said the further erosion of Plymouth's manufacturing base was "deeply worrying", particularly as there were high hopes for X-FAB's long-term growth and links to its research centres. We can only hope that a purchaser for the business can be found to avoid any further erosion in this vital business."



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