US solar wafer manufacturer MEMC Electric Materials has announced measures to accelerate a cost reduction strategy including reducing its global workforce by 1,300, around 20 per cent.
The company will decrease its production capacity, which it said is in response to prevailing market conditions, with a polysilicon factory in Italy being temporarily shut and potentially closing altogether. In addition, the company will reduce capacity at its Portland and Malaysia production facilities.
It expects cash use associated with the restructuring to be around $180m, more than half of which is expected to occur after 2012. The measures taken are forecast to provide annual cash flow benefits of more than $200m by the end of 2012.
MEMC is also evaluating its existing goodwill and deferred tax assets. A non-cash charge associated with the potential impairment of goodwill is expected to cost between $200m and $400m. The company also predicts a non-cash charge related to the potential realisability of deferred tax assets could range from $225m to $275m.
Ahmad Chatila, CEO of MEMC, said, 'We believe these actions strengthen MEMC in the near term and position us for more profitable growth in our core businesses - semiconductor wafers and solar energy system. Changed market conditions require that we improve productivity across all segments and in solar move to a more balanced manufacturing model aligned with our downstream business. We are moving quickly on these carefully considered actions and expect increased cash flow during the next year. Going forward, we remain committed to our tradition of providing advanced technology and superior service to our global semiconductor and solar customers.'