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Critical subsystems supplier Ultra Clean Holdings is continuing to consolidate manufacturing operations in the U.S. and shift additional manufacturing to Asia to reduce operating costs as its major customers see significant order declines in semiconductor, solar, and flat panel markets.

However, non-semiconductor revenue increased 5% sequentially to US$19.0 million or 40% of total revenue in the fourth quarter.  The company said that 26% of total revenue was now being generated from operations in China, which has been boosted by revenue from solar gas abatement subsystems.

"We continue to view this severe business slowdown as an opportunity to expand market share, transfer additional manufacturing to Asia, and consolidate our US-based assembly operations. In the fourth quarter, we consolidated additional US based production into our Hayward, California facility, ahead of schedule, closing two more US facilities and downsizing a third,” commented Clarence Granger, Ultra Clean's Chairman and Chief Executive Officer.

Losses for the fourth quarter of 2008 grew to US$52 million, compared to the previous quarter loss of only US$1.9 million. A US$48 million write down on assets with the acquisition of Sieger, the company noted.

Ultra Clean reduced its U.S.-based workforce by an additional 17% in the quarter, bringing the total year-to-date reduction to 32%. The company expects to implement further cost cutting measures in 2009.