STMicroelectronics to close plant; 330 employees affected

October 19, 2001 – Geneva, Switzerland – STMicroelectronics plans to close its Rancho Bernardo 6-inch front-end wafer fabrication production and transfer the fab’s products, processes and equipment to ST’s manufacturing facilities in Carrollton, TX, and Singapore. Three hundred and thirty employees will be affected.

The move is targeted for completion near the end of 1Q02. ST’s nearby design and R&D operations, which employ about 75 people, are unaffected by the decision.

The Rancho Bernardo fab is fully dedicated to the production of print head ICs for Hewlett-Packard, one of ST’s major customers and strategic partners. ST is rationalizing its production by transferring manufacturing operations to larger, lower-cost facilities. Through this change in manufacturing strategy, ST will continue to support HP in reducing component cost in the ink-jet printer market.

In sensitivity to employees, many will be offered the opportunity to relocate to other company facilities in Carrollton, TX, and Phoenix, AZ. ST will offer completion bonuses and outplacement assistance to those not relocating.

The company, in addition to the impairment charge taken in the second quarter relating to this facility, has accrued a further $23.3 million in impairment charges in the 2001 third quarter.


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