Pallidus Inc. Faces Major Layoffs and Expansion Cancellations

News Summary

Pallidus Inc., a semiconductor startup in Albany, has laid off 37 employees, marking a 44% reduction in its workforce due to challenges in the silicon carbide market. The company has also canceled its planned $443 million expansion in South Carolina, which was expected to create hundreds of jobs, leaving employees and the community concerned about its future. Pallidus is pivoting back to its Albany operations, aiming to innovate with its M-SiC platform while scaling back production amidst lower-than-expected demand.

Albany Hit Hard by Pallidus Inc. Layoffs and Facility Cancellations

Pallidus Inc., a semiconductor supply chain startup based out of Albany, New York, finds itself navigating a turbulent period as it has recently laid off 37 employees, which amounts to a staggering 44% of its workforce. The company made this painful decision last week in light of shifting dynamics in the silicon carbide sector.

The layoffs were concentrated at Pallidus’ Albany location, and they wipe out much of the goodwill gained in the past few years. Despite successfully securing over $100 million in funding, which is impressive for a startup in the Capital Region, recent signs pointed to underlying troubles. This included job cuts last year, as well as an unclaimed state tax credit awarded in 2022, hinting that not all was well in the company’s world.

Major Expansion Plans Now on Hold

Adding salt to an already open wound is the company’s decision to cancel its much-anticipated expansion in Rock Hill, South Carolina. This ambitious project was projected to involve a $443 million investment and was expected to create hundreds of new jobs, but now it’s officially off the table. Pallidus is now working to exit the Rock Hill property, which was set to host a massive 300,000-square-foot facility dedicated to high-volume manufacturing and a new corporate headquarters.

This plant was set to kick off operations in Q3 2023, but now employees and local officials are left scratching their heads as they try to understand the sudden about-face. It reflects a broader trend of semiconductor manufacturers grappling with economic uncertainties, leading many to reconsider their major facility investments.

Rethinking Priorities and Production

Now, Pallidus is pivoting its focus back to Albany, where it plans to innovate through its patented M-SiC platform and build new customer partnerships. The company is making a strategic move away from lesser technology towards larger, more specialized chip bases, thus abandoning its previous commitment to 6-inch (150 millimeter) silicon carbide wafers.

Silicon carbide wafers are highly prized in the industry due to their high-temperature resistance, making them ideal for use in power electronics. Reports suggest that over half of all electric vehicles may be utilizing silicon carbide powertrains by 2027, underscoring the demand for this technology amidst backdrop market challenges.

Production Scaled Back and Future Questions

As Pallidus repositions itself, it will scale back production in Albany due to lower-than-expected demand. The hope is to expedite development for specialty wafer programs and new products. The market trend towards 8-inch wafers will create more manufacturing challenges but stands to offer significant cost benefits for companies that successfully transition.

News of the layoffs, communicated through an internal email, hit many employees hard, especially following a recent meeting that had seemingly assured job security. The unexpected job cuts have left many former employees stunned and searching for answers.

Industry Shift and Retracing Steps

Moreover, Pallidus is not alone in these challenges. Other companies within the semiconductor landscape, such as SkyWater Technology, have also found themselves in a similar situation, having canceled significant expansion projects due to market conditions.

In the ever-evolving and volatile world of semiconductor manufacturing, Pallidus Inc. is now at a crossroads. The workforce reduction and retreat from ambitious expansion signify a critical moment of reflection and change for this New York-based startup, leaving both employees and the wider community hopeful for a brighter future ahead.

Deeper Dive: News & Info About This Topic

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• Manufacturing Dive: Pallidus Relocates HQ’s Operations to South Carolina
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