Texas Instruments

(TXN) - Get Report

said Wednesday it will close a plant in Santa Cruz, Calif., and lay off 600 employees as part of a cost reduction program.

The Santa Cruz plant, which manufactures semiconductors used in computer hard-disk drives, will close in phases through 2001. Texas Instruments will consolidate manufacturing primarily in its existing Texas plants in Dallas and Houston.

In late February, the chipmaker

warned a second time of lower-than-expected revenue in the first quarter. It cited weakening demand and higher inventories as factors in the shortfall.

Shares of Texas Instruments closed at $31.51 on the

New York Stock Exchange

, down $1.30, or 4%.