MEMC Electronic Materials (NYSE: WFR) announced this morning that it plans to lay off 20 percent of its staff, as well as idle solar materials facilities, as part of a global restructuring effort.
MEMC has been struggling with a downturn in computer chips, and has faced challenges in the solar energy technology business, reports Barron’s.
MEMC will cut 1,300 job, including 250 U.S. jobs. The job cuts will be split between 41 percent in semiconductor technologies and 47 percent in the solar materials area.
The Wall Street Journal says that the price of solar-grade polysilicon, a key component in the construction of solar panels, has fallen from about $500 per kilogram a few years ago to $25 per kilogram. Earlier this year the cost was still higher than it is now, at $70 per kilogram.
In addition to cutting jobs, MEMC will halt production at its solar water facility in Merano, Italy, and may completely shut the facility down. Production will be reduced at the Portland, Oregon facility that makes monocrystalline and multicrystalline materials used in solar wafers.
According to Forbes:
For Q4, the company now sees non-GAAP revenue of $789 million to $861 million, with non-GAAP EPS ranging from a loss of 5 cents a share to a profit of 10 cents. On a GAAP basis, the company expects a loss of $5.20 to $6.38 a share, and revenues of $523 million to $585 million. Consensus estimates had been for non-GAAP revenue of $961.9 million and 8 cents a share in non-GAAP profits.
CFO Mark Murphy says the company will remain a leader in technology and service for their semiconductor and solar customers.
MEMC has been given a “sell” rating by Wunderlich Securities’ Theodore O’Neil, and he has cut the price target from $11 to $3, reports Barron’s.
That’s all for now,