The chips are down

If we’ve learned anything the past few years, it is that Northern Virginia’s high tech economy is not immune to the same cycles that have stricken other sectors of the American economy. This notion became crystallized this week when international chip maker, Micron, announced it was cutting 10 percent of its entire work force due to a slump in the memory chip market. This translated into the loss of around 560 jobs at Micron’s Manassas plant a chip-producing facility that less than a decade ago symbolized Northern Virginia’s emergence as a high tech Titan.

Once known as Dominion Semiconductor, the Manassas plant will lose almost half its work force in layoffs announced Friday as demand for its dynamic random access memory (DRAM) chip continues to ebb. As with any other industry, a combination of foreign competition and the value of its product played a major roll in the downsizing. Officials at Idaho-based Micron, which has seen its stock value plummet the past year, claim the layoffs were necessary for the company to survive the slump while retooling for the next high tech boom. Hopefully there will still be a plant in Manassas when the next wave hits.

Corporate explanations of the need for a leaner Micron is no conciliation for those fired this week. Layoffs are not pretty, regardless of whether they occur in the American auto industry, U.S. Steel or the high tech sector. There’s always hope that Northern Virginia’s still-robust economy can absorb these cuts. Only time will tell if this 10-year flirtation with high tech dominance represents a sustained drive for our economy or whether it was simply a temporary boom.

The combination of Toshiba and IBM which formed Dominion Semiconductor in 1995 was hailed by then Gov. George Allen as the transformation of the Old Dominion into the “Silicon Dominion,” referring to Northern California’s Silicon Valley. This term was later polished by Allen’s successor, Jim Gilmore, to “the Digital Dominion.”

With the fall of WorldCom, the Internet economy as well as the troubles currently experienced by America Online, it’s clear the Digital Dominion is in decline. Hopefully this is cyclical and not permanent.

At its height, Dominion was planning to employ a work force of 1,600 by mid-2002 with expansion into the flash memory sector. This never fully materialized and now Micron which purchased the Manassas facility in April 2002 is trying to deal with a chip market in flux.

There are two paths the struggling chip maker can take from this day forward. Weather the storm hoping to some day grow on the crest of some future innovation or wither until its presence in Manassas disappears all together. We can only hope the former occurs and the Digital Dominion’s reign is not limited to 10 years.