Fujitsu Ltd. said Friday that it will stop producing flash memory semiconductors in the United States early next year due to cooling demand for the product worldwide amid falling prices.

The move would effectively mark the firm's withdrawal from full-scale semiconductor production overseas.

Fujitsu had earlier terminated chip production in Europe.

A flash memory plant in Gresham, Ore., operated by a California subsidiary, Fujitsu Microelectronics Inc., will shut down at the end of January, Fujitsu said. It plans to liquidate FMI and lay off 670 employees.

The electronics giant said a factory in Aizu Wakamatsu, Fukushima Prefecture, will make flash memory chips after the closure of the U.S. plant.

The Oregon facility began operations in October 1988 as Fujitsu's first overseas base manufacturing semiconductors.

But the plant reduced product lines drastically and focused on flash memory mainly for use in cellular phones in line with an April 2000 decision by the parent firm to pull out of production of dynamic random access memory.

The plant further curtailed output following a plunge in flash memory chip prices in early 2001.

Fujitsu said it had considered options to continue producing the chips in the U.S., including forming a joint venture with a U.S. partner.

"But we found that recovery of demand for the product is unlikely to happen in the initially forecast second half of 2002 and it is likely to be delayed by an additional six months or one year," Fujitsu said in a statement.