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Komag shuts U.S. factories

The disk drive parts maker ceases manufacturing at its facilities in California and Oregon within the past 10 days, moving all production to Malaysia.

KUALA LUMPUR, Malaysia--Komag, which makes components for disk drives, has closed all of its U.S. factories and relocated production to Malaysia to cut costs.

The San Jose, Calif.-based company ceased manufacturing at sites in Fremont and Santa Rosa, Calif., and Eugene, Ore., within the last 10 days.

The three production lines that were moved to Malaysia are already producing disks at high yields, Komag said in a statement.

"Now that all of our production comes from our Malaysian facilities, our U.S. presence will be focused on research and development. Our R&D team in San Jose will continue to develop finished media, and substrate development efforts will remain in Santa Rosa," according to the company.

By shifting all manufacturing to Malaysia, Komag expects to reduce the cost of production. The company predicts that fixed manufacturing costs, including employee, factory and equipment expenses, will be around $35 million per quarter compared with $52 million in the first quarter of 2001. The savings will be "instrumental in returning the company to profitability," Komag said.

CNET Malaysia staff reported from Kuala Lumpur.