The Japan-based company says the closure "reflects the continuing slump in the worldwide semiconductor market" that has forced the company to "reorganize its worldwide manufacturing structure to eliminate surplus flash memory capacity, a process that unfortunately requires the closing of the Gresham plant" and shifting operations to a manufacturing facility in Aizu-Wakamatsu, Japan, which it co-owns with AMD.

Established in October 1988, the Gresham plant (21015 SE Stark St.) was Fujitsu's first overseas wafer fabrication facility and one of its key production bases for memory products. In April 2000, the company spent $350 million converting all production lines to flash memory -- used for cell phones and other handheld electronic devices -- but because of the downturn it has been running at well below capacity. Fujitsu last August tried to get AMD to buy a 50% share of the Gresham plant, but the deal fell through.

All 650 of the plant's employees, down from nearly 900 at mid-year, will remain on the payroll with full benefits until the end of January, after which they will receive "generous severance benefits." The 250 layoffs in August were preceded by canceled bonuses and sharp cuts in pay and hours during July.Oregon already has the second highest unemployment in the nation, but it particularly affects the City of Gresham. Fujitsu paid about $2 million a year in property taxes to the City of Gresham -- 10% of Gresham's total property tax revenues -- all of which pay for police and fire services.