- The Washington Times - Wednesday, December 19, 2001

Toshiba Corp. will sell its Manassas-based subsidiary, Dominion Semiconductor, and lay off an undetermined number of the computer chip-maker's 1,700 workers, the company announced yesterday.
The Japanese electronics manufacturer expects to complete the sale of Dominion, a wholly owned subsidiary, to Idaho-based Micron Technology Inc. by the end of January. The sale will include Dominion's assets, land, buildings and equipment.
Terms were not disclosed.
Dominion produces dynamic random access memory (DRAM) chips, which are used in personal computers. It also produces flash-memory chips, an advanced chip used in cell phones and digital cameras, through a joint venture with SanDisk Corp., a California company.
The sale of Dominion to Micron only includes the DRAM business. Toshiba said it will shift its flash-chip business to Japan.
Layoffs are expected at Dominion's Manassas plant, but the number of job cuts has not been determined, a Dominion spokesman said. The plant's 1,700 workers include employees and contract workers.
It is the largest employer in Manassas and surrounding Prince William County.
"We do not know the extent of the reduction in force. As soon as we know, we will tell our employees," said Dominion spokesman Mark Holcomb.
The Manassas plant, built in 1996, was originally a joint venture between Toshiba and IBM. Toshiba purchased IBM's ownership interest in 2000, and announced a $700 million expansion to accommodate the new partnership with SanDisk.
The state announced more than $1 million in future grants and tax breaks for Manassas and Dominion when the expansion was announced. The company will not receive the benefits if it is unable to meet and maintain its expansion targets, Mr. Holcomb said.
Micron, the world's second-largest chip-maker, said it does not plan to upgrade or expand the Manassas plant once it takes it over.
Shares of Micron were trading for $31.81 when the New York Stock Exchange closed yesterday, up from the previous day's close of $30.70. In Tokyo, Toshiba shares rose 2 percent to $3.59.
"This transaction clearly demonstrates Micron's commitment to further strengthen its memory business in the face of a significant industry downturn," Micron Chief Executive Steve Appleton said in a statement.
The computer-chip industry has had its worst year in 2001 because of weakened demand for personal computers and falling prices for chips.
The chip industry, a $200 billion business in 2000, declined about 60 percent this year, according to Dan K. Scovel, an industry analyst for Needham & Co.
"In the long run, [the Dominion sale] is good for the industry because they are getting rid of a competitor," Mr. Scovel said.
Motorola Inc. said yesterday it is cutting 9,400 jobs, or more than 8 percent of its work force, in a push to return to profitability in 2002.
The troubled tech company, which makes computer chips and cell phones, has now shrunk its work force by 32 percent since August 2000.
The latest round of job cuts, to be made over the course of the next year, include 4,000 from its semiconductor operations.
Toshiba joins Fujitsu in pulling out of the DRAM market. The only major DRAM production left among the Japanese makers is a joint venture between NEC Corp. and Hitachi.
This article is based in part on wire service reports.

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