Create a free account to continue

Hynix Semiconductor Closing U.S. Chip Plant

Second-largest memory chip manufacturer will close its only U.S. factory amid changes in production standards and steep price declines buffeting the industry.

SEOUL, South Korea (AP) -- Hynix Semiconductor Inc., the world's second-largest memory chip manufacturer, said Thursday it will close its only U.S. factory amid changes in production standards and steep price declines buffeting the industry.

Hynix said in a statement that production at the facility in Eugene, Oregon, would cease by the end of September.

Park Seong-ae, a Hynix spokeswoman, said the manufacturing plant was established in 1998 and employs about 1,200 people, including 150 Koreans.

The company said it may continue to utilize the facility for a "similar business," though did not elaborate.

Other options included selling the equipment, building and land to another semiconductor manufacturer, or selling the land and building and relocating the equipment.

"As soon as decisions are finalized, the company will communicate plans to the Eugene community and Oregon government leaders," Hynix said.

Oregon Gov. Ted Kulongoski said the state would deploy a "rapid response team" to assist laid-off workers.

"The Hynix announcement today of their intention to close their Eugene facility is disappointing and comes at a difficult time for the Eugene community," Kulongoski said in a statement.

"Hynix has played a significant role in Eugene's economy and their departure not only impacts their employees but the entire county."

Hynix is one of Lane County's biggest employers, with an annual payroll of $62 million.

The city and Lane County granted millions of dollars in property-tax waivers to entice the South Korean firm, then known as Hyundai, to build its $1.4 billion plant in west Eugene. The tax breaks were a source of controversy from the day the company announced in May 1995 that it would build the plant here.

Park, the spokeswoman, said that the semiconductor industry, aiming to improve efficiency and cut costs, is moving away from production of older 200 mm wafers toward newer 300 mm wafers. The Eugene plant makes the older wafer.

Park said Hynix is also reviewing options for four other 200 mm wafer production facilities in South Korea and China.

Hynix said in April that it swung to a net loss in the first quarter on a sharp fall in memory chip prices due to oversupply in the industry.

Samsung Electronics is the world's largest manufacturer of computer memory chips.

More in Industry 4.0