SiliconBeat

Zilog of San Jose is the latest chip maker to announce job cuts and salary reductions, along with a 23 percent drop in sales for its fiscal 2009 third quarter compared with the year-before quarter and a more than doubling of its net loss.

“The rapid contraction in the global economy and the clouded outlook for demand has caused us to take significant cost reduction actions that included a 35 percent reduction in our worldwide headcount and a 10 percent salary reduction for all of our North America employees along with executive staff.” said Darin Billerbeck, Zilog’s president and chief executive officer.

In August, the company reached a temporary truce with Bryant Riley, its largest shareholder,  who wanted to nominate his own director to the board and sought changes to the company’s by-laws.

   Facing an uncertain economic outlook while working off a glut of microproccesors and memory, spending on the construction and equipping of semiconductor fabrication facilities will likely fall by double digits in 2008, according to an analysis by Semiconductor Equipment and Materials International, an industry organization for makers of equipment used in the production of semiconductor, display- and solar-related devices.

Spending on equipping fabs in 2008 is expected to decline 15 percent compared to the nine percent growth last year.  The analysis represents a downward revision of the outlook reported in SEMI’s October 2007 Fab Database Report.

Spending on fab construction projects is expected to decline in 2008 by nine percent, with 12 new fabs expected to start construction, adding capacity for the production of up to 1.53 million more wafers per month. The five biggest spenders in 2008 are expected to be Flash Alliance, a joint venture between Toshiba and SanDisk; Samsung; Hynix Semiconductor; Rexchip, a joint venture between Elpida Memory and Powerchip; and Powerchip itself.

Semiconductor manufacturing capacity is projected to grow by about 11 percent in 2008, while memory fabs are projected to increase capacity by 18 percent year over year.