NEW YORK (AP) — Specialty chip maker Tower Semiconductor Ltd. said Tuesday it will cut jobs and buy cheaper materials as part of a cost-cutting plan.
The company, which makes chips for other semiconductor companies at its Israeli plants, did not say how many employees it intends to lay off. It said the job cuts will save the company $5 million a year.
Tower said the cuts will come in ''non-operational and service related functions,'' which will be outsourced; it will achieve further cuts through staff transition and organizational changes.
It also expects to save $10 million a year through multiple sourcing of materials and spare parts, substitution of expensive materials and price negotiations with suppliers.
The company expects further savings through efficiency programs and a ''major saving'' by acquiring used chip-making tools. It said these tools can be bought at prices significantly below new tool prices.
The company said its production volumes have grown consistently and the previously announced expansion of its second production plant should be completed in 2008.