(Updates with closing share price in final paragraph.)
Dec. 8 (Bloomberg) -- MEMC Electronic Materials Inc., the second-largest U.S. maker of polysilicon, said it will fire 20 percent of its workforce and cut production after prices for the main raw ingredient used in solar cells and semiconductors plunged.
MEMC will combine its SunEdison project development unit and solar materials business, cutting more than 1,300 jobs worldwide, including 250 in the U.S., the St. Peters, Missouri-based company said today in a statement. It will idle a facility in Italy, reduce capacity at a plant in Portland, Oregon, and scale back a factory it’s building in Malaysia.
The company is seeking to lower its costs after a global glut of polysilicon drove down prices 63 percent this year.
“Because of oversupply in the solar industry, you can buy polysilicon and wafers below production costs, so it’s cheaper for them to just shut down those facilities and buy it on the spot market,” said Jeffrey Bencik, an analyst with Kaufman Brothers LP in New York, who rates MEMC shares a “hold.”
MEMC will take a $700 million charge in the current quarter and lowered its forecast. The company expects sales of $789 million to $861 million in the fourth quarter, compared with a Nov. 2 forecast of $800 million to $1.1 billion.
“We are reducing capacity and solar materials to take advantage of lower cost product alternatives and achieve a more balanced manufacturing model,” Chief Financial Officer Mark Murphy said today on a conference call.
MEMC shares fell 1 cent to $4.20 at the close in New York.
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