SUMCO Launches Drastic Si Wafer Business Optimization

SUMCO Corporation announced the drastic business restructuring plan on Thursday, involving production optimization of semiconductor silicon (Si) wafer, withdrawal from photovoltaic Si wafer business and consolidated workforce reduction by 15% or approximately 1,300 people. The firm will shut down production lines for 300-millimeter-dismeter semiconductor Si wafer at Nagasaki plant, Nagasaki, Japan while the firm close Ikuno plant to manufacture 200mm semiconductor Si wafer in Hyogo Prefecture, Japan. As for photovoltaic Si wafer, the firm will close the solar plant inside Kyusyu plant’s Imari area in Saga, Japan as well as dissolve the production subsidiary, SUMCO Solar, in Wakayama, Japan.

SUMCO will complete the close of 300mm wafer production lines at Nagasaki plant within fiscal 2012 ending in January 2013. The firm plans to integrate 300mm wafer production into Imari plant and the subsidiary in Taiwan. Ikuno plant will be closed within fiscal 2013 and 200mm wafer production will be focused on Imari plant and Nagasaki plant. The firm will also shrink production capacity for 150mm or less diameter semiconductor wafers, closing production lines in Imari plant during fiscal 2013. The production will be integrated into Miyazaki plant in Japan and the subsidiary in Indonesia.

Workforce downsizing would contribute to fixed cost reduction at 7 billion yen per year. Total effect of the business reorganization plan is expected to result in accumulative cost down of 18.5 billion yen for fiscal 2012-2014 as well as lower depreciation cost of 6.2 billion yen.

SUMCO announced the firm posts consolidated extraordinary loss at 58.2 billion yen on the full-year financial accounts for fiscal 2011 as the restructuring cost. Thus the firm’s full-year consolidated net loss is estimated to expand to 85 billion yen in fiscal 2011 from previously estimated 9 billion yen. The latest full-year consolidated financial forecasts are net sales at 248 billion yen, operating profit at 1 billion yen and recurring loss at 6 billion yen.

In order to cover sharp decrease of the equity capital along the business reorganization, SUMCO offered its major shareholders to subscribe preferred shares up to total 45 billion yen. Sumitomo Metal Industries and Mitsubishi Materials, the main shareholders, are likely to invest 15 billion yen each. The final contract conclusions would be in early March followed by the payment in early May. Sumitomo Metals and Mitsubishi Materials hold each 27.82 shares in SUMCO.