Online information source for semiconductor professionals

Due to the decline in front-end equipment sales and the subsequent under-utilization of its sub-assembly equipment facility in Singapore, ASM International is increasing the pace of shifting products currently manufactured in The Netherlands to Singapore. In a plan originally set out in April, 2008 to reduce operating costs and return to profitability in its front-end division, ASM began shifting generic parts and subassemblies of its vertical furnaces, epitaxy and PECVD tools and components for its ALD tools to Singapore. In the latest transfer phase all vertical furnace manufacturing will move to Singapore over the next 12 months, the company said.

As a result, its assembly facility in Almere, The Netherlands will see a workforce reduction of approximately 200. According to ASM, approximately 350 people will remain as its European workforce, focused on R&D and regional sales and service support activities.

"Lowered capacity utilization at our FEMS facility - the result of deteriorating global economic and industry conditions, today allows us to execute several steps in our 'April 2008 Roadmap to Front-end Profitability' simultaneously and to accelerate our Roadmap,” commented Chuck del Prado, President and Chief Executive Officer of ASM International. “The measures we are announcing today will lead to a leaner and more focused, cost-competitive Front-end operation, and one that is capable of generating higher gross margins with a structurally lower cost-base."

Vertical furnaces have long been regarded by chip manufacturer’s as a commodity product, many choosing to select several vendors for thermal processing applications at single sites to keep competition fierce for sales. ASM said that the move to Singapore would result in a 30% or more reduction in furnaces cost break-even level.