On March 6th, foreign media reported that High Tower Semiconductor plans to shut down most of its operations in Newport Beach, USA for three weeks amid an industry slowdown, which will result in nearly 700 employees taking leave. Gaota Semiconductor has confirmed that it will close most of its business from April 1st to 7th, and plans to close more business from July 1st to 7th and October 7th to 13th. 

On March 7th, according to the Science and Technology Innovation Board Daily, Gaota Semiconductor issued a statement stating that this is a planned normal maintenance and we will continue to fulfill our wafer delivery commitments as scheduled. Tape out work will continue without interruption. 

According to foreign media reports, Gaota Semiconductor mainly maintains the normal operation of the factory by adjusting employees' work and vacation. 699 employees at the Newport Beach factory will be required to use their accumulated vacation time during the shutdown period, while others in departments such as safety, facility management, and customer support will continue to work but must take alternative weekly breaks before June 15th. Employees who do not have available vacation time during these weeks can apply for unemployment during that time. Tower Semiconductor did not disclose the total number of employees at its Newport Beach factory.

High Tower Semiconductor stated in a notice to employees and state employment development departments that orders at its factory at 4321 Jamboree Road are decreasing as customers are still dealing with inventory. The plan to shut down for three weeks is to avoid longer shutdowns, which may include layoffs. The affected workers include engineering technicians, financial planners, manufacturing workers, and utility operators. 

This shutdown decision came just seven months after Intel cancelled its $5.4 billion acquisition of the chip manufacturer. 

In August 2023, Intel announced the termination of its acquisition plan for Tower Semiconductor due to the inability to obtain regulatory approval in a timely manner. According to the terms of the merger agreement and the termination of the agreement, Intel will pay a termination fee of $353 million to Gaota. However, in September, the two companies reached a new foundry agreement, under which Intel will provide foundry services and High Tower Semiconductor will utilize Intel's manufacturing plant located in New Mexico. 

However, Gaota Semiconductor is not the first company to announce a shutdown plan recently. In February, Microchip also announced that it would shut down for two weeks in March and June. Ganesh Moorthy, President and CEO of the company, said, "Considering the weak macro environment and customers' continued actions to reduce inventory, we are cautious about recent demand. Therefore, we are taking measures to tightly manage inventory levels. As a result, we plan to conduct a two-week shutdown at our large wafer manufacturing facilities in the March and June quarters, and reduce activity at other factories 

From the recent shutdowns of some semiconductor giants, it can be seen that customers are still digesting the large amount of chips hoarded due to chip shortages in the early stage. However, since the end of last year, the boom brought by AI and the slow rebound in consumer electronics demand may become the driving force for manufacturers to rise from the bottom. 

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