Fairchild Semiconductor – Maine’s largest publicly traded company – is shutting down its business for one week monthly through March because of a decline in microchip orders, the company acknowledged.

About 850 employees at the South Portland-based company are affected.

Fairchild, a global company, has a factory on Western Avenue and its corporate headquarters on Running Hill Road. Workers must take the time off as paid vacation or unpaid leave, said Patti Olson, the company spokeswoman.

The monthly shutdowns also are in effect at the company’s other U.S. locations, including in Pennsylvania, California and Utah.

The temporary closures could continue into the second quarter, depending on the economy and company finances, Olson said.

In the U.S., Fairchild Semiconductor has undergone a monthly shutdown since November 2008, because of decreasing revenues and lower demand for its products.

Temporary shutdowns are scheduled at factories worldwide but the schedules vary, based on laws in the countries where plants operate, Olson said. The company has 10,000 employees worldwide.

The closings lower electricity and maintenance costs, but those savings are considered a side benefit, Olson said.

The reason for the shutdowns is decline in orders for the microchip maker. “If we have an uptick, we will have people back at work immediately,” Olson said. “This is purely supply and demand driven.”

Olson said it is fairly common in the manufacturing industry for plants to idle during slowdowns to avoid a backlog in inventory.

But Olson said it is unusual for Fairchild to have to institute a monthly shutdown, a measure taken as consumer spending has dropped off and the national recession has deepened.

She said the company closings are being planned around existing holidays to make it more convenient for employees to have time off.

Last week, Fairchild closed its Western Avenue factory, which employs 600, to coincide with winter break at public schools. Factory machines are idled during the shutdowns, Olson said.

Employees at the corporate office on Running Hill Road have more flexibility in choosing the week they would take off in February.

Fairchild reported $320 million in revenues for the fourth quarter of 2008, a 25 percent drop from the previous quarter.

Olson said that typically Fairchild sees an increase in demand for microchips at the end of the year, because of the holiday gift-buying season and consumer interest in electronics such as video games and cell phones.

In 2008, Fairchild reported a total of $1.5 billion in revenues, which was off 5.7 percent from 2007.

Fairchild projects sales to range between $220 million and $245 million for the current quarter, well short of the average forecast of $289 million.

The company had announced before Thanksgiving 2008 that it planned shutdowns of up to two weeks through the holidays.

In 2009, Fairchild opted to continue shutdowns monthly until business rebounds, but the decision has not been widely publicized.

“We are planning by the quarter and just waiting to see how things go” with the economy, Olson said.

In late 2008, the company dropped plans to move its headquarters from South Portland to a new, energy-efficient building in Scarborough.

The company also announced a worldwide layoff of 12 percent of its work force in mid-December. In South Portland, between 50 and 70 people lost their jobs.

A spokeswoman for Fairchild Semiconductor says demand for the microchips the company produces for consumer electronics increases the company will continue to shut down for a week each month.