Mitsubishi To Close Durham Plant, Will Outsource Module Ops.
(5:15 p.m. EDT, 9/1/98)
By Andrew Maclellan
Citing DRAM prices 20% below the level needed for profitability, Mitsubishi Electric Corp. has confirmed today plans to close its Durham, N.C., plant as of Nov. 6, and relocate its memory module test and assembly operations to California. Mitsubishi will also centralize all of its Durham-based discrete chip assembly and test in Nagano, Japan.
Mitsubishi will lay off 230 employees as a result of the move.
The announcement marks the second time in just six months that the company has made cuts at the Durham site.
In a move last January that cost 200 jobs, Mitsubishi closed an aging plant that had been making 1- and 4-Mbit DRAM and announced its intention to turn the Durham campus into a design, test, and assembly site to serve its U.S. OEM customers' build-to-order demands. The site was to have provided test and assembly for up to 2 million 64-Mbit DRAM chips and as many as 500,000 memory modules monthly.
Under the revised plan, subsidiary Mitsubishi Semiconductor America will outsource all module assembly operations to the Electronic Device Group of Mitsubishi Electronics America Inc., Sunnyvale, Calif.
The move is expected to lower costs, eliminate the need for near-term investment in module capacity, and allow Mitsubishi to outsource build-to-order logistics through selected partners, according to Michael Bocian, general manager of the Electronic Device Group's memory division.
A team of 100 engineers will remain in Durham, with their design focus now dedicated to system-on-a-chip and microcontroller design, according to a company spokesman.
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