It appears that the effects of the low global economy have finally been felt by the world's two leading providers of foundry manufacturing services, namely the Taiwanese Semiconductor Manufacturing Company and United Microelectronics Corporation. The two have recently been reported to be planning some serious cost reductions, which will see the firms cutting costs by as much 20% each.

According to a recent news article on Digitimes, TSMC is said to be planning a series of layoffs and ask some if its employees to take unpaid vacations, as part of a cost-reduction plan which the company will put into place in an attempt to lower its expenses by as much as 20%. UMC will also try to reduce its expenses by the same percentage, as it has already informed its employees of a plan to implement a new schedule that will see its employees take an unpaid day off, during each week.

 

The news comes to confirm the weak global economy which has lead to an abrupt downturn in sales of computer systems, mobile phones, TVs, automobiles and a high number of other consumer products. The situation has also affected the demand for integrated circuits, which has seen an impressive drop. Major companies in the computer hardware industry have already announced their plans to cut costs by laying off some of their employees, or even sending them home on unpaid vacation.

 

As part of the cost reduction plan, TSMC has recently been reported to have imposed a hiring freeze amid a global economic downturn, which led to posting the biggest decline in two years in the company's monthly sales. Regarding the low financial results, one of its spokesmen, J.H. Tzeng, said that TSMC would continue to hire people, but only on a case-by-case basis, "This is because of the economic slowdown. Generally speaking, there's a hiring freeze".