Sep. 8--Updated 1:45 p.m. Tuesday

MEMC Electronic Materials announced Tuesday it will cease the production of silicon wafers and ingots it manufacturers for the semi-conductor and solar industries out of facilities in O'Fallon and Sherman, Texas.

The company expects to close portions of the O'Fallon plant as part of a consolidation it expects will take place late this year and early 2011.

MEMC will continue to manufacture Silicon on Insulation and conduct research and development at the O'Fallon site.

MEMC said 540 employees in Texas and Missouri will be affected by the move. Some of the displaced workers will be offered positions elsewhere in the company.

The company, headquartered in O'Fallon, employs 4,900 at locations around the globe.

"We must continue to aggressively drive all unnecessary costs out of the business during these extraordinary times," chief executive officer Ahmad Chatila said in a release provided by the company. "We will be shifting this high-volume production closer to a number of our customers, who are located in lower cost regions."

MEMC reduced its third quarter revenue projections, $300-$350 million, after an August equipment failure disrupted polysilicon production at its Pasadena, Texas plant.

The company now projects third quarter revenues of $285-315 million.

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