600 UK jobs lost as NEC quits Dram market

NEC has axed 600 jobs at its Scottish plant following an announcement that it will quit the Dram market by 2004.

The company said that the cuts were just the beginning and that around 4000 jobs globally would go by the end of the year. It explained that the job losses are a result of an effort to cut six-monthly wafer production at the plant from 28,000 to 15,000 by the second half of this year.

NEC has also abandoned plans to increase production at its Shanghai plant, making a saving of £112.2m. Instead, it will integrate all three of its Japanese plants into one.

The company added that it will exit the Dram market by 2004, following a drop in memory prices. It will focus instead on broadband devices, mobile phones and optical storage devices.

The move into this area will be marked by the spin off of NEC's optical chip business into a new company called NEC Compound Devices.