VAT Media Release on Short Time Work

Ad Hoc announcement pursuant to Art. 53 LR

June 15, 2023


VAT Group said today it introduced a short time work scheme for about 650 production employees at its two manufacturing facilities in Haag, Switzerland. The program was approved by the Canton of St. Gallen’s Office for Economy and Labor for a period of three months until the end of August 2023 and can be extended if necessary.

The short time work program allows VAT to retain employees who have received significant technical training so that the company has the resources it needs to quickly meet the recovery in demand still expected in 2024, as VAT has previously communicated. The measure is intended to provide job security for highly-trained production employees in the wake of the sharp decrease in semiconductor related orders reported by the company over the past quarters.

The program is not expected to have any adverse effect on customers or product quality. VAT successfully implemented a similar program during the severe market downturn in 2018 and 2019.

The current downturn reflects sharply lower spending by semiconductor customers in the face of slower consumer spending, persistently high interest rates, and lower economic growth in many markets. The weaker market situation has been intensified by increasing trade tensions involving especially the US and China related to semiconductor production.

As a result, and as previously reported, VAT expects demand to remain muted over the rest of 2023 before returning to growth in 2024, driven by positive long-term drivers such as global digitalization and the transition to renewable energies. In anticipation of this recovery, VAT continues to make significant investments in its facilities in Switzerland, including an innovation center in Haag, expected to be opened early 2025.