Siemens puts plant expansion on hold

Siemens Nixdorf has postponed plans to further develop its Tyneside semiconductor plant following a slowdown in the components market.

The German company, which issued a profits warning last week, said the time was not right to go ahead with the second phase of the plant.

Following the warning, Dr Heinrich Von Pierer, president and chief executive officer of Siemens, said the company would review its semiconductor operations and look at cutting production capacity.

However, a Siemens representative denied this was a reversal. 'We never put a date in place for the second phase,' she said. Improvements in productivity in the first phase had also led to Siemens doubling production. 'We're producing in the first phase the number of wafers we expected to produce with both phases.'

She added: 'We had always said that phase two of the Tyneside plant would only be considered if the semiconductor market was in a good state. At the moment, the market isn't right.'

In another development, Siemens' plans to sell its PC operation to Acer have met with problems, due to what Acer called unforeseen complexities (PC Dealer, 22 July).

Acer chairman Stan Shih spoke to PC Dealer in London last week, before leaving for Germany to continue negotiations in person.

'Originally we targeted completion in two months. But from a legal point of view and from due diligence, this was not possible,' he revealed.

One of the complexities was the question of pensions for about 2,000 plant workers and whether Acer would retain the same level of commitment as SNI.

Shih refused to be drawn on details, but said: 'This is now a key area of discussion for us. It is important for Acer and Siemens. We have to guarantee the success of the agreement and take care of the people.'

See page 10.