GREENVILLE, S.C., June 25 /PRNewswire/ --

KEMET Corporation (NYSE: KEM) today announced a reduction of manufacturing and support personnel in its U.S. and Mexican facilities in response to the severe inventory correction currently being experienced in the electronics industry. This correction

follows two years of tremendous growth in electronic product shipments in calendar 1999 and 2000. Effective June 30, 2001, the U.S. workforce will be reduced by approximately 675 employees, while the reductions in Mexico will be approximately 1,130 employees. There are an additional 80 employees participating in an early retirement program. These actions will result in an annualized reduction in expense of approximately $36 million at a cost of approximately $2.2 million this quarter.

"KEMET has responded to declining unit shipments over the past several quarters by reducing employment through a variety of voluntary programs, such as attrition, special leaves, and early retirement programs. We regret the hardship this action will have on the affected employees," said Larry Sheppard, Vice President, Human Resources. "We will be taking steps to minimize the impact on employees, including providing separation benefits and assisting in their search for other employment."

David E. Maguire, chairman and chief executive officer, stated, "In my forty-two years in this industry, the rapidity and depth of the current correction is unprecedented. KEMET's strategy is to be the preferred capacitor supplier to the most successful electronics companies in the world. In recent weeks, many of these companies have issued warnings indicating that they will not meet analysts earnings estimates for the June quarter and that they have very poor visibility regarding the level of inventory and the rate at which it is being consumed. Many have had reductions in force themselves. There is a growing consensus in the electronic industry that, while shipments will ultimately return to long-term sustainable rates, the recovery will take longer than previously estimated.

Mr. Maguire further stated, "KEMET has a strong position in the capacitor market. We led the industry in sales of all tantalum capacitors last summer when the industry could not meet demand, and we expect to maintain this leadership as the industry recovers. This is cycle number ten for me, and I am confident that, in time, the industry will resume its historical growth trend. On top of all of our voluntary efforts to reduce costs, this action allows KEMET to bring employment levels more in line with current and projected business levels."

KEMET Corporation, headquartered in Greenville, South Carolina, is the world's largest manufacturer of solid tantalum capacitors, the fourth largest manufacturer of multilayer ceramic capacitors, and a leader in the development of solid aluminum capacitors. KEMET's common stock is listed on The New York Stock Exchange under the symbol KEM.

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