October 23, 2014

Qimonda shutting its doors, relocating to North Carolina

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By Greg Duggan
Observer staff

A local technology company has announced it will close its doors in Williston and head south for warmer pastures.

Qimonda revealed on Friday that it will consolidate its North American design and development operations, to which the Williston branch belongs, in Raleigh, N.C. The company works in the field of dynamic random access memory, or DRAM, to produce memory chips for consumer products including cell phones and gaming systems,

The departure will affect more than 120 employees currently working at the Williston facility on Hurricane Lane.

“The decision was made to leverage the resources better by combining the two development and design centers … in a larger site,” said Donna Wilson, director of communications for Qimonda. “By the nature of designs, (employees) work back and forth in the same room. It’s easier if you have them in the same building.”

Alan Walker, senior director of Qimonda’s Burlington Development Center in Williston, explained his branch looks for ways to reduce the size of circuits on the memory chips, which cuts costs by producing more from the same amount of initial product.

“The DRAM industry has lost about 80 percent of its price in the last 10 months. The company is looking for ways to become more productive,” Wilson said.

The site in North Carolina employs about 350 people, Wilson said. Wilson and Walker said the decision to move was made about a month ago.

“I think people are, I would term it as ‘shocked,’” Walker said. “They’re disappointed, but also people are looking towards the future.”

Wilson said Qimonda plans to extend offers to 50 to 75 employees to relocate to North Carolina, and is working with placement agencies to find work in Vermont for the remaining employees.

The Williston location will close on June 30, 2008, Wilson said. She added that some employees will likely start transitioning to North Carolina in the spring.

Though efforts to reach employees were unsuccessful, others in the business community expressed dissatisfaction and surprise with the decision.

“I’m extremely disappointed,” said Frank Cioffi, president of GBIC, or the Greater Burlington Industrial Corporation.

He gave several reasons for his reaction.

“They are a great company, their employees make a very, very decent income and receive great benefits. They’re in an industry that is a growing industry. It’s a technology-based, knowledge-based company with the type of jobs we want to keep and grow here in Vermont,” Cioffi said. “Our first concern is always for employees and their families.”

Cioffi also said Qimonda was a driving force behind changes made in 2006 to the state’s economic incentives. The change made a shift from tax credits to cash-based incentives.

Cioffi said Qimonda’s business structure kept it from paying corporate income taxes in Vermont, so it sought other incentives.

Though Qimonda was not the only company to push for changes in economic incentives, Cioffi said, “They were the first company that kept saying to us they couldn’t use the Vermont economic incentives. We had hopes they were going to grow here.”

 

EFFORTS TO STAY LOCAL

Such a history, particularly when coupled with other efforts to expand in Vermont, suggest that Qimonda had no expectation of the move until recently. Last year, Bill Dunn, president of Hillside East Corp., the business park owner of Qimonda’s Williston location, pursued zoning changes in the town to allow for an expansion of Qimonda’s facility. When initial efforts failed, Dunn submitted a revised proposal for zoning changes to a smaller area, which the Planning Commission Approved.

But when the process of making changes appeared as if it would take longer than the company wanted to wait, Qimonda sought another site, announcing in July that it would relocate to nearby Technology Park in South Burlington. Qimonda was scheduled to move to South Burlington on March 1, 2008, according to Tim McKenzie, director of business development for Technology Park Partners.

Now, McKenzie and Technology Park Partners have a vacant building on their hands, though McKenzie said Qimonda had signed a 10-year lease for a 62,000 square foot building.

Walker would neither confirm nor comment on the lease.

“We knew there were adjustments to their plans when a month or so ago we stopped doing fit-up, the tenant improvements to their space,” McKenzie said. “We’re working with them to satisfy both parties.”

Though McKenzie said Technology Park Partners would fill the space as soon as possible, he said his company faces a challenge in that it also needs to fill a 54,000 square foot building it began constructing after signing a lease with Qimonda.

“Once (the building for Qimonda) was leased up, we felt it was time to build another building,” McKenzie said. “That complicates the picture a little bit, but we’re working diligently to lease space in both buildings.”

 

FILLING THE VOID

While Technology Park Partners seeks a new tenant, GBIC is also searching for ways to fill the vacancy left by Qimonda.

“The labor force there (at Qimonda) is highly skilled,” Cioffi said. “We think their skills are very marketable in the State of Vermont to other companies, and certainly to our region as well. We’re working with the Vermont Department of Economic Development to reach out and try to work with the Vermont Department of Labor to find job opportunities for employees there.

“We’re also trying to recruit other companies that we might attract here,” Cioffi said, though he said he could not share names of potential businesses.

Qimonda’s sales and marketing centers in California and Texas, as well as a manufacturing site in Virginia, will remain in their current locations.

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