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Photronics’ mask shop in China to close as part of cost reduction program
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Loss-making photomask manufacturer Photronics is closing its only mask
shop in China with the loss of approximately 75 jobs. The move is part
of Photronics' efforts to lower its operational breakeven point. Mask
shops in other Asian locations including Korea, Singapore and two sites
in Taiwan will supply customers in China, the company said. In October
2008, Photronics announced the closure of its mask shop in the UK and
recently re-negotiated its lease agreement at its joint venture mask
shop with Micron Technology.
"While we remain extremely optimistic in our ability to continue growing our business within Asia, the integrated circuit mask market in China is not materializing as we had hoped," commented Constantine S. Macricostas, Photronics' chairman and chief executive officer. "Unfortunately China’s photomask market remains relatively small and we do not foresee a viable path to profitability within an acceptable timeframe. To retain our cost competitiveness we must align our manufacturing capacity with end-market demand."
The closure is expected to realize annual savings ranging from $4 to $5 million. Photronics expects to record an after-tax charge of between $10 million to $14 million in fiscal 2009.