Israel's Tower Semiconductor is planning to furlough 699 staff at its Newport Beach, California site.

In a WARN report filed on January 30 and published by the Employment Development Department (EDD) in the state of California on February 28, the company notified the department of its intention to temporarily shutter its plant on Jamboree Road for three week-long periods.

Tower Semiconductor
Tower Semiconductor site in Newport Beach, California – Tower Semiconductor

The furlough periods will take place between April 1-7, July 1-7, and October 7-13. According to local press reports, employees will be asked to use accrued time off during the shutdowns while those who don’t have any available holiday have reportedly been told to file for unemployment.

Affected workers include engineering technicians, financial planners, manufacturing workers, and utility operators.

Tower Semiconductor did not respond to a request for comment or to answer DCD’s questions about how, if at all, the company was planning to support its employees during the furlough period or whether any executives would be sacrificing any of their salaries in solidarity with its workers.

Earlier this month, the company posted its Q4 2023 financial results, with fourth-quarter revenue falling by 12.4 percent due to a decrease in demand from the automotive sector. However, CEO Russell Ellwanger said a rebound was already occurring in several market segments, and the company expected to see “sequential revenue growth throughout the year.”

The news comes several weeks after it was reported that Tower Semiconductor had submitted a proposal to the Indian government for the construction of a $8 billion chip fabrication plant in the country. The semiconductor manufacturer is hoping to produce 65nm and 40nm chips at the plant for use in automotive and wearable electronics.

In September 2023, Intel pulled out of plans to acquire Tower Semiconductor for $5.4bn amidst pushback from regulators. Instead of the acquisition, the two companies struck a deal that saw Tower invest up to $300 million to “acquire and own equipment and other fixed assets” at Intel Foundry Services' New Mexico fabrication plant.

At the start of the year, microcontroller manufacturer Microchip Technology announced it would be furloughing employees at its Gresham, Oregon plant for two weeks in March, with a further two-week temporary shutdown slated for June.

Microchip told investors that a slowdown in sales during Q3 of 2023 made the furlough necessary, but would not alter the company’s plans to expand the Gresham plant using money it had been awarded under the US CHIPS and Science Act.