Nieke Roos
20 June 2019

The American semiconductor company, Macom, has shut down its Nijmegen office. This is part of a big, worldwide restructuring plan, including the closure of six more product development facilities: in France (Toulouse), Japan (Tokyo), Florida (Melbourne), Massachusetts (Lawrence), New Jersey (Holmdel) and Rhode Island (Lincoln). Approximately 250 employees will be let go, 20 percent of the total workforce. Once fully implemented, the restructuring will provide an expected annual expense savings of approximately 50 million dollars.

Macom is a developer and producer of radio, microwave and millimeter wave semiconductor devices and components for telecom, industrial and defense applications. Headquartered in Lowell, Massachusetts, it has multiple design centers, Si, GaAs and InP fabrication, manufacturing, assembly and test, and operational facilities throughout North America, Europe, Asia and Australia. In addition, it offers foundry services.

The Nijmegen office opened its doors on the Novio Tech Campus (link in Dutch) two and a half years ago. The team led by Mark Murphy specialized in gallium nitride and silicon germanium technologies, designing and marketing solutions for RF energy, beamforming and aerospace and defense. The Novio Tech Campus offered the RF talent and resources Macom needed to grow, Murphy said at the time.

Credit: Macom

Two and a half years later, the outlook has changed dramatically. More and more semiconductor companies are going through a tough patch and Macom is certainly no exception. Last year, it recorded a turnover of 570 million dollars, an 18 percent decrease compared to 2017. Revenue in the second quarter of this year amounted to 128 million dollars, down 15 percent both year-on-year and sequentially. Net loss from continuing operations was 46 million, up from 16 million in the same period of 2018 and 23 million in the previous quarter. Revenue for the third quarter is expected to be between 107 million and 109 million dollars, compared to prior guidance of 120-124 million. The updated guidance reflects the impact of discontinuing shipments to Huawei and certain of its subsidiaries and affiliates as a result of US trade restrictions.

The 20 percent staff cut is a permanent reduction in hourly, salaried and management workforce, including personnel in R&D, production, sales and marketing and general and administrative functions. According to Macom, substantially all affected employees have been notified and customary transition assistance will be provided as a result of the restructuring. On top of closing seven product development facilities, the company also announced it will no longer invest in the design and development of optical modules and subsystems for data center applications.

The restructuring plan comes shortly after John Croteau resigned as president and CEO. Croteau has a history in Nijmegen: he worked at NXP before moving to Macom in 2012. In an unexpected move last month, he was replaced by board member Stephen Daly. As one of his first tasks, the new president and CEO had to announce the cuts. “We do not make these decisions lightly, however, these actions are necessary in order to strengthen our strategic plan,” Daly commented. No one at the company was available for comment on the Nijmegen plight.