The recovery plan: closing Amagasaki and Ikuno, exiting solar wafers (2012)

Cutting away your older self

File this restructuring under “recession-era cost cutting” and the facts go thin. What SUMCO closed were Amagasaki, where the Sumitomo line had begun making silicon, and Ikuno, which had carried the old small-diameter work — both plants that ran back through the company’s own lineage. With record profits giving way to three consecutive years of net losses, president Taguchi Yoichi chose to fold up assets held since the founding era and narrow the business onto the 300mm wafers at the centre of demand. What sits here is a heavy act of selection: cutting away your older self in order to protect the company.

That said, one can only say this rebuild turned the company around because one already knows semiconductor demand recovered afterwards. The solar wafer business it abandoned never came back as a pillar; the 1,300 jobs cut and the Amagasaki and Ikuno sites closed are not recoverable. Operating profit in the recovery years fell short of the company’s own plan, and the market still judged that plan too optimistic. That the old plants could be folded in the middle of the crisis was likely because the duplication the three lines had brought together was, by then, a burden obvious to everyone. The very speed with which failure was admitted and wound up became the ground on which the next 300mm acceleration was built.