Business
11:20 am
Wed April 6, 2011

Freescale Semiconductor Closing Japan Plant Early Due to Quake

One of the largest companies based in Central Texas, Freescale Semiconductor, says it is closing a manufacturing plant in earthquake ravaged Sendai, Japan.

The company made the announcement in a statement posted on its website:

The March 11th 9.0 magnitude earthquake off the coast of Japan near Sendai caused extensive equipment and infrastructure damage to Freescale’s facility. The ongoing safety concerns, damage to infrastructure and other basic services in the region, compounded by numerous major aftershocks, prohibit Freescale from returning the facility to an operational level required for wafer fab production in a reasonable timeframe. Freescale believes the best way to serve its customers is to focus efforts on accelerating the 200mm transition to alternate facilities.

Freescale's chairman and CEO Rich Beyer said in the statement that his company will continue paying affected employees "for an extended period of time" and provide a "comprehensive severance package."

The facility was already slated for closure in December 2011. The disaster is only accelerating that process.

"It would be premature to speculate on the implications [for Austin]," company spokesman Rod Hatley told KUT News by telephone. He said the company was in the process of transferring the manufacturing capacity from Sendai to facilities in Austin and Chandler, Arizona.

Freescale employs 20,000 people worldwide. About 5,000 of those employees are in the Austin-area. Freescale Semiconductor's 2010 gross revenue was about $4.5 billion.

As KUT reported last week, Freescale is not the only Texas semiconductor company to be affected by the disaster in Japan. Texas Instruments was also affected, and delays in chip production have caused a domino effect for other electronics manufacturers.