NXP will reportedly close its plant in Nijmegen, the Netherlands, and three factories in the United States, with outgoing CEO Kurt Sievers saying the company should complete the plan "as soon as possible," but the closure process is still expected to take several years.
An NXP spokesman said: "No detailed decision has been made about which factory will be closed and when." But he also pointed out that the closure is "logical." It is reported that the entire transition period is expected to last for ten years, during which time chip production will be transferred to two new factories in Dresden and Singapore. The factories in Dresden and Singapore will use 12-inch wafers to produce chips, while the three factories in Nijmegen and the United States currently use 8-inch wafers, and the latter's chip output is about half of the former.
New factory has higher profit margin
NXP's strategy has also changed: the new factories will be operated through joint ventures, co-built with other companies, thereby reducing NXP's individual risk-taking.
Sievers said the new factories will help reduce fixed costs and production costs while increasing profit margins. Therefore, he said at a technology conference in Boston that "it is a wise choice to say goodbye to these 8-inch factories as soon as possible."
The Nijmegen plant mainly produces automotive chips
Andy Micallef, COO of NXP Semiconductors, also confirmed that the old factories will be completely closed. He expects the entire migration to 12-inch factories to take ten years. The new factories in Dresden and Singapore are expected to be operational in 2027.
The Nijmegen plant mainly produces automotive chips: chips from this factory are found in almost all cars in the world. In addition to chip manufacturing, Nijmegen also has a research and development department. The plant has 1,700 employees from more than 50 countries. NXP calls it "one of the most diverse companies in the region" and one of the largest chip manufacturing bases in Europe.
Last year, the plant laid off 12 people due to "economic headwinds." NXP has been affected by the global chip industry downturn due to a decline in consumers' willingness to buy cars and electronic products.
Earlier this year, NXP received a 1 billion euro loan from "Europe" to invest in the research and development and innovation of the next generation of chips, which are also carried out in Nijmegen.
A factory without eternal life
Paul van Gerven, a technology journalist at the tech news site Bits&Chips, said it had been expected that the Nijmegen plant was "not destined to last forever." The plant, also known as "the cathedral" because of its architectural appearance, opened in 1988. "But this is the first time that a specific year has been tied to the closure."
He expects the plant to be completely closed by 2037, but it could be earlier. "Factory conversions like this are very rare, and the Netherlands does not seem to be the best location for new advanced factories."
Reference link: https://www.gelderlander.nl/nijmegen/chipmaker-nxp-sluit-fabriek-in-nijmegen-bedrijf-wil-dit-zo-snel-mogelijk-doen~a1228a9b/
Source: Content compiled from gelderlander
