SUMCO to Restructure Wafer Production Lines for Better Profitability

SUMCO Corporation announced on Tuesday major restructuring plan to improve the profitability including integration of production plants for wafer with 200 millimeters diameter and reduction of workforce. The firm decided the drastic plan when the firm is forced to revise the outlook downward for the year ending January 2011. Through the plan, the firm tries to regain profitability in and after the year starting February 2011.

The firm posted 16.774 billion yen of recurring loss for 9 months through October compared with 87.15 billion yen loss in the same period of 2009. The loss was narrower but the business condition got severer when the operating loss was 1.4 billion yen in August-October compared with 1.3 billion yen of profit in May-July due to slow demand and higher yen rate.

The firm tries to improve the cost structure for better competitiveness to secure profit even at low level selling price for wafer products. The firm expects 16 billion yen of cost cutting in the year ending January 2012. The firm targets 100 billion yen of operating profit before depreciation in the year ending January 2014.

The firm transfers idling production facility for wafer with 300 mm diameter at Nagasaki to Taiwanese subsidiary to increase the Taiwanese capacity from 160,000 units per month to 260,000 units. With the higher capacity, the firm tries to improve the cost competitiveness at Taiwanese operation. The firm reduces production lines of wafer with 200 mm diameter from 37 lines to 23 lines at home and abroad. The firm improves the productivity while focuses on higher valued products to improve the profitability.