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Electronics Production | March 22, 2007

NXP to close German unit, axe 550

NXP Semiconductors, the independent semiconductor company founded by Philips, today announced plans to close its manufacturing facility in Boeblingen, Germany by the end of 2007.
Approximately 550 employees are affected by the closure. The majority of the production load will be transferred to NXP's factories in Nijmegen and Hamburg. The move reflects the company's “Business Renewal" strategy which focuses on enhancing the company's competitiveness, operational effectiveness and profitability.

The decision was taken against the backdrop of a low production load which was reduced by an additional 30 percent as a result of the recent withdrawal of the company from two underperforming businesses. The move of production to Nijmegen and Hamburg will assure continuity of supply to customers, reduce the European cost base and raise the overall productivity and efficiency by further improving the economy of scale within these two sites.
"This step is not an easy one but inevitable in light of the current and expected economic situation of this factory. We thoroughly evaluated all options within the international NXP environment and looked at new processes, products and partnership options. Unfortunately, no alternatives were found to be realistic or economically viable," explained Dr. Volker Kuckhermann, general manager, NXP Semiconductors in Germany.

Today NXP began a dialogue with the trade union and works council to work out a satisfactory social plan for its employees.

"Our objective is to work out a solution with the works council that reflects our social responsibility. We will offer a social plan and have asked the job center in Boeblingen for support in organizing an on-site consulting service to help the employees find new positions as soon as possible", said Dr. Volker Kuckhermann.

The German NXP organization will continue to be an important hub in NXP's global operations with innovation centers in Hamburg, Nuremberg and Dresden contributing to the international research and development activities. Hamburg, the headquarters of the German operations with more than 2,400 employees, is also the strategic center of the company's Automotive, Identification and standard-application discretes activities. The Hamburg site produces more than one million wafers per year.

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