Things are tough all over in the technology industry, and they are even tougher if you are a NAND flash maker. Not only do NAND makers have to deal with the overall bad economy, but the price of NAND is also below that of what it costs to make the modules according to Micron.
CNET News reports that Micron announced it will cut its workforce by 15% and reduce its flash output down at the same time. This announcement comes on the heels of the 20% pay reduction that Micron executives were forced to take last week.
While workforce reductions will take place in Micron fabs around the world, reports say that the bulk of the cuts will be felt here in the U.S., specifically at Micron's Boise fab. Micron said in a statement, "The combination of declining customer demand and product oversupply in the marketplace has driven selling prices for NAND flash memory significantly below manufacturing costs."
The Intel and Micron joint venture -- IM Flash Technologies -- will stop producing NAND flash at the Micron fab in Boise. This closure will reduce the production of NAND by about 35,000 wafers per month. Other Micron and Intel fabs, including one in Utah, will continue operations.
The reductions and fab closures are a direct result of Micron posting continued losses for the last seven quarters. Micron reported a massive $1.6 billion loss in fiscal 2008. The restructuring charges and related expenses are expected to cost Micron in the area of $60 million. However, Micron reports that its cash operating margin is expected to exceed $175 million next year.
The NAND Micron produces is used in products like digital cameras, DAPs and Micron's own line of SSDs.