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pixies
And that 2 bedroom flat costs about half a million to a million dollar now.
Semiguru
Applied Materials never established any manufacturing in Switzerland. They ...
Applied to cut jobs, move solar manufacturing to Asia
Dylan McGrath
5/11/2012 7:23 PM EDT
SAN FRANCISCO—Chip and solar panel equipment supplier Applied Materials Inc. will cut about 250 jobs and relocate manufacturing for its solar wafer systems from Switzerland to Asia, the company said Thursday (May 10).
In a regulatory filing, Applied (Santa Clara, Calif.) said its board of directors approved the plan to restructure its Energy and Environmental Solutions (EES) unit in light of challenging industry conditions affecting the solar photovoltaic (PV) and light-emitting diode (LED) equipment markets. The actions undertaken are consistent with the Applied's previously-stated goal to reduce the EES segment’s annual revenue breakeven level to $500 million in fiscal 2013, the company said.
As part of the plan, Applied said it expects to relocate manufacturing for its Precision Wafering System (PWS) solar business based in Cheseaux, Switzerland, to Asia. PWS business operations and customer support functions will be relocated primarily to Treviso, Italy, the headquarters for Applied’s Baccini Cell Systems, and Xi’an, China, the site of Applied’s Solar Technology Center, the company said.
PWS’s headquarters and new product development will remain in Switzerland, Applied said.. The plan also includes significant reductions in development activities for LED, the company said.
Workforce-related actions will be finalized and implemented in accordance with local legal requirements and in consultation with employees and employee representative bodies, as required, Applied said.
The estimated pre-tax cost of implementing the restructuring plan is expected to be between $70 million and $100 million, Applied said. The cost will be incurred over the next 12 to 18 months, the company said.
In a regulatory filing, Applied (Santa Clara, Calif.) said its board of directors approved the plan to restructure its Energy and Environmental Solutions (EES) unit in light of challenging industry conditions affecting the solar photovoltaic (PV) and light-emitting diode (LED) equipment markets. The actions undertaken are consistent with the Applied's previously-stated goal to reduce the EES segment’s annual revenue breakeven level to $500 million in fiscal 2013, the company said.
As part of the plan, Applied said it expects to relocate manufacturing for its Precision Wafering System (PWS) solar business based in Cheseaux, Switzerland, to Asia. PWS business operations and customer support functions will be relocated primarily to Treviso, Italy, the headquarters for Applied’s Baccini Cell Systems, and Xi’an, China, the site of Applied’s Solar Technology Center, the company said.
PWS’s headquarters and new product development will remain in Switzerland, Applied said.. The plan also includes significant reductions in development activities for LED, the company said.
Workforce-related actions will be finalized and implemented in accordance with local legal requirements and in consultation with employees and employee representative bodies, as required, Applied said.
The estimated pre-tax cost of implementing the restructuring plan is expected to be between $70 million and $100 million, Applied said. The cost will be incurred over the next 12 to 18 months, the company said.
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george.leopold
5/11/2012 7:41 PM EDT
It was no accident this was announced late on a Friday. When will U.S. companies start investing all the cash their sitting on in U.S. manufacturing operations?
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MBADave
5/14/2012 2:12 PM EDT
As soon as our business-unfriendly governments get out of their way and stay out of their way. Business is 100% about profits, the world is a small place now, and the profits belong to the owners, not the government or other social interests. Owners can't make profit in Country "A", fine... move to country "B." Its that simple.
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resistion
5/12/2012 6:39 AM EDT
Scary to see signs of consolidation even for LEDs and PV.
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agk
5/12/2012 8:51 AM EDT
All the best companies moving into Asia seems that soon the best products will come out from Asia competitive with China made items.
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goafrit
5/12/2012 3:04 PM EDT
This is how the world is evolving to be. We will see more cuts in the Western world as they help Asia to dominate and lead this century. There is no going back on this - this is what all the firms are doing.
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Bert22306
5/12/2012 4:31 PM EDT
I suppose that the more this happens, the sooner Asian manufacturing costs will rise (with their standard of living), and finally the tide will slacken. This did happen wrt Japan, after WWII, after all.
The other option will be that western countries will start slapping high tariffs or other penalites on this sort of corporate move, which would also work to put a damper on profits and/or on the number of toys people can afford to buy.
It's hard to sympathize with the tunnel-visioned MBA mentality of the corporate execs, however. Whenever one of these announces that their "top priority is the shareholder," watch out. They're about to screw you and ultimately the company itself, with their short-term thinking.
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ChipBuilder
5/13/2012 3:26 PM EDT
Cheers, I agree.
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ibm221
5/13/2012 8:27 PM EDT
what western engs need to learn is chinese way of efficient life style. you either adopt to it or be force to it.
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MBADave
5/14/2012 2:29 PM EDT
Chinese themselves will leave this "efficient" lifestyle behind as they make more money and accumulate more wealth. Just like Japan did in 1980s,.. just as USA did in 1900's,.. Just as England did in 1800's, just like France did in 1700's,... Just like Spain did in 1600's... The Dutch.. The Italians... The Greeks... The Egyptians... And now its China's turn to rise to the top of the heap. And after they've eaten their fill, they'll decline just like each one of their predecessors did and for exactly the same reasons. This phenomena is known as: "Economic Succession" and is naturally occurring in our civilization. Chinese are very smart and already know this. They have this saying: "Wealth only lasts for three generations." And they are right. Just look at our USA Post WW2 third generation. US$16Trillion in debt. Yes, USA parents are giving our kids a real good head start in life, yea? Greed comes in many forms, doesn't it?
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ibm221
5/14/2012 8:37 PM EDT
So far the chinese govt is quite conscious and blocks this trend. ie. no suburban expansion, high rise apt instead of independent house.
In general all chinese need is a 2 bedroom flat and $5000 to fill it up with cheap electronics (as US) and furnitures.
cheap utility cost, transportation cost, close ties with ur neighbor, low carbon footprint....
that's the spirit of chinese power.
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pixies
5/15/2012 9:40 AM EDT
And that 2 bedroom flat costs about half a million to a million dollar now.
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Bert22306
5/14/2012 8:50 PM EDT
I very much doubt that anyone in the US would adopt a Chinese lifestyle BECAUSE the US government tells them to. Although it is true that people are moving closer in to cities, rather than go further and further out as they used to in the 1950s and beyond. The trend is definitely shifting back.
As to how long the Chinese people will allow their government to dictate their lives, that will be fascinating to watch. I'm reminded of Rumania, end of 1989. Hopefully, it will be a peaceful and gradual change.
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prabhakar_deosthali
5/13/2012 8:33 AM EDT
May be there is not enough sunshine to test those solar products that they make in Switzerland.
And the real market for solar products is in Asia where abundant sunshine availability through out the year makes a strong case for the solar products.
And the trend is to move the manufactruing where the market is . Isn't it?
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subman
5/13/2012 10:24 AM EDT
They were manufacturing in Switzerland? Perhaps they should have employed a few short-sighted MBA's to vet that decision back a few years ago. Doesn't look so bright in retrospect, and I doubt it looked very bright at the time the decision was made.
Abundant sunshine has little to do with solar power markets, or the we'd have booming markets in equatorial countries. No level of sunshine makes the current forms of solar economic vs. fossil fuel based grid electricity. Government subsidies, regulation, and artificially high electricity prices due to regulation are the drivers of solar panel consumption.
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chanj
5/13/2012 7:06 PM EDT
Moving manufacturing to Asian countries is already an inevitable trend. Whichever corporations do not do so, they will be seen as lagging behind and so are their coming revenge.
The lost of job due to the trend may affect a lot of people. However, the country or the organization may get better focus and re-train people to do different jobs. There is no doubt the world is changing into a gigantic logistic organization. People do what they are good at. Countries will do what they are good at.
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escher
5/13/2012 9:33 PM EDT
I wonder how the vaunted 'Swiss quality' of these machines will be maintained once they are no longer made there. On a related note, if making products close to the customer made so much sense, wouldn't you have an awful lot of Foxconn plants in the US? It is all about maximizing short-term profits while ruining the company in the long run.
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ibm221
5/14/2012 8:42 PM EDT
this can save some swiss to make watches instead, mechanical one I mean, a complete waste of resources in the end. (who really need that shit?)
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Bert22306
5/14/2012 9:05 PM EDT
Short term profits is definitely what's at stake here, and your mention of Foxconn is right on target.
Even now, hasn't Foxconn started to make some concessions recently, with respect to the workers, following pressure from Apple?
Eventually, the workers themselves will be pushing back, against such practices as living in dormitories, or 60+ hour work weeks, just as they did in the West.
That's when the tide of manufacturing (and design?) jobs toward China will abate. This is the natural order of things.
Parenthetically, we still have India and the African continent with lots and lots of low-cost labor. This takes time.
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t.alex
5/13/2012 11:37 PM EDT
Moving manufacturing to Asia is inevitable. The western engineers can then focus more on the r&d activities.
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ronnielee
5/14/2012 11:18 PM EDT
Yea, agree with you - nevertheless, looking at the trend to date, looks like organizations are also moving R&D into ASEAN region, very likely due to the intensives provided by AFTA or respective nation's government in that region - just to share.
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resistion
5/14/2012 1:02 AM EDT
Remember, this is solar and LED, not silicon. Clean energy resources and improving energy efficiency should be high priority everywhere.
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resistion
5/14/2012 1:04 AM EDT
..should say not advanced silicon devices.
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Semiguru
5/15/2012 12:08 AM EDT
Applied Materials never established any manufacturing in Switzerland. They bought an established Swiss design and manufacturing company and now are taking the advanced designs and manufacturing technology and run with it to Asia for the purpose of higher profits only. These dear US companies have been handing now for too long the entire industrial might over to China and all of it for short term profits only. What else? Where is Applied heading in the future is the ultimate question? Perhaps Mongolia?
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