Micron Technology Inc., the largest U.S. producer of memory chips, announced plans to cut as many as 2,000 jobs as demand for semiconductors continues to slide.
About 500 jobs will be eliminated shortly at Micron's operations in Boise with the rest happening before the end of the fiscal year in August, the company said in a statement Monday. The move follows Micron's announcement in October that it would eliminate about 2,850 jobs, or 15 percent of its work force. Micron and Intel Corp., the world's largest semiconductor maker, have a joint venture, IM Flash Technologies, based in Lehi.
"We remained hopeful that the demand for these products would stabilize in the marketplace and start to improve as we moved into the spring," Chief Executive Officer Steve Appleton said in the statement. "Unfortunately, a better environment has not materialized."
Memory-chip manufacturers built too many production lines and flooded the market with products that sell for less than they cost to produce. Now they are suffering shrinking demand as consumers and companies buy fewer computers. Micron's losses have totaled $1.9 billion over its past two fiscal years.
The earlier job-cut plan, aimed at scaling back production, will span two years. Monday's reduction, which centers on an older plant in Boise, will reduce the worldwide work force to about 14,000. The company will have about 5,000 workers left in Idaho after the move.
The effort will cost $50 million and lead to annual savings of about $150 million, Micron said.
Micron reported seven annual losses in the past 11 years as production costs eclipsed revenue. Memory factories cost more than $3 billion and take more than a year to build.
The cost of restarting plants is so high that manufacturers run them 24 hours a day, even when spot market prices are less than the price of production.