STMicroelectronics NV, Europe's No. 1 semiconductor maker, reduced its capital spending plan for the second time this year and will close a Canadian plant because of slowing demand for its products.
The company will reduce equipment spending in 2001 to US$1.5 billion, from the US$1.9 billion it had forecast earlier, it said in a statement. It will also take a US$30 million charge this quarter to close a plant in Ottawa, Ontario, employing 450 staff.
ST has already cut investment plans once this year. In March, it reduced spending from the US$2.5 billion it had planned in January, down from the US$3.3 billion the company spent last year on capital equipment.
"Capital expenditures have been reduced in response to the continuing slowdown in the semiconductor market, which has left the industry with excess manufacturing capacity, particularly in older technologies," the company said in the statement released through Business Wire.
ST shares fell as much as 1.1 percent to 41.55 euros, after rising earlier. The shares are down 10 percent since the beginning of the year. ST is one of the main chip suppliers for Nokia Oyj, the world's biggest mobile-phone maker.
Global semiconductor sales are expected to fall 14 percent this year on slumping demand in the US and Asia, the World Semiconductor Trade Statistics industry group said earlier this week.
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