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Electronics Production | February 23, 2006

NEC to close Irish plant

NEC Semiconductors Ireland announced that it would cease production at its plant in Ballivor, Co. Meath at the end of September 2006 due to high operating costs.
The decision to cease production at Ballivor was taken by NEC Semiconductors Ireland's parent company, NEC Electronics Corporation. NEC Electronics is forecasting group operating losses for the fiscal year ending March 31, 2006 and has been stepping up cost-cutting measures to improve its financial performance.

The decision to cease production at Ballivor is one of these measures. The consolidation of production from Ballivor into other international plants, which have lower operating costs, will allow NEC Electronics to reduce its global manufacturing costs while maintaining global capacity and competitiveness.

The decision was announced to Ballivor employees by NEC Semiconductors Ireland managing director, Kenji Yamashiro, at a meeting at the plant today.

NEC Semiconductors Ireland employs 300 full-time and 50 part-time workers in semiconductor manufacturing and related services. The company has initiated discussions with employee representatives and state agencies on compensation packages and professional out-placement support services, to ensure that the impact to employees, their families, and the local community and economy is minimized.

In a statement following the meeting Mr. Yamashiro said: "We are very proud of the quality of the work and the legacy of NEC Semiconductors Ireland, and appreciate the efforts of everyone at the Ballivor plant. Our immediate concern is the welfare of our employees, and we will do everything we can to make this transition as easy as possible for them. We would like to thank the Irish government and IDA Ireland for their strong support throughout our 30-year history."

Hideto Goto, executive vice president in charge of manufacturing at NEC Electronics, stated, "The international semiconductor market in which we operate is extremely competitive. The decision to close the Ballivor plant was a very difficult one, but after considerable analysis, we concluded that we could not justify the high cost of keeping it open. This is an unfortunate but necessary step to ensure our competitiveness."

NEC Semiconductors Ireland provides semiconductor products and services to the electronics industry. Approximately 70% of the integrated circuits are used by the automotive sector in engine management, dashboard controls, ABS brakes and intelligent airbag controls.

The plant was one of the first companies backed by IDA Ireland to come to Ireland, and commenced production at Ballivor in 1976. The plant will remain operational through September 2006 to fulfill existing production commitments to customers.

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