Matsushita Closing Plant In Puyallup

TOKYO - Matsushita Electric Industrial, the world's largest maker of consumer electronics, said it will shut its U.S. semiconductor operations, close a Puyallup factory and fire 340 workers.

The Japanese company said plunging prices of computer memory chips forced it to take the step. The Puyallup factory is Matsushita's only U.S. chip plant.

The Washington plant makes four-megabit dynamic random access memory (DRAM) chips, which are used to store information in computer-related equipment such as printers. The price of those chips has dived to $1.50, down 85 percent from their 1995 peak, said Koichi Fujimoto, an analyst at Okasan Securities.

"The main reason for the decision was the rapid price decrease of DRAM chips," Matsushita spokesman Akira Kadota said. "The profit level for our North American business was very low."

Matsushita Semiconductor of America, Matsushita's 7-year-old U.S. semiconductor manufacturing subsidiary, will cease to exist as of December.

Kadota said employees will be given severance packages and also may have the opportunity to transfer to other Matsushita subsidiaries. The company's Japanese employees will be transferred back to Japan.

The U.S. closure should have little effect on Matsushita, analysts said. The subsidiary accounted for only about 2.7 percent of the company's profit last year.