Dutch NXP Semiconductors Says It Will Close Plants

NXP Semiconductors BV said it will close or sell four plants and cut 4,500 jobs. NXP, the former chipmaking arm of Royal Philips Electronics NV, said it is responding to "a challenging economic environment, a weak U.S. dollar" and its own decision to sell most of its wireless chip manufacturing operations to STMicroelectronics NV in April. It said it would spend $800 million to cut the jobs, which will then save them $550 million a year. The company also said it would close or sell factories in Fishkill, NY; Nijmegen, Netherlands; Hamburg, Germany and Caen, France. The CEO said this restructuring is a tough measure and it is regrettable that they need to let people go. However, the changes will make NXP a strong, profitable and growing company with a positive cash flow. The company reported a net loss of 312 million euros ($440 million) in the 2nd-Q, down from a 348 million euros net loss in the 2nd-Q a year earlier. NXP said it will now focus on making chips for cars and ID cards, among others. The company suffered a round of bad publicity earlier this year when a Dutch university showed that one of its best-selling chips, used in 'swipe' cards that grant access to railways and government and corporation buildings, is vulnerable to hacking.