South Korea's STS Semiconductor unit investing $172M to expand PHL factory

The Philippine unit of South Korea's STS Semiconductor and Telecommunications Co. Ltd. is expanding its output capacity, investing $172 million to build two new facilities in Clark Freeport Zone in Pampanga to meet an expected surge in demand as global economies continue to recover from the financial crisis.

 

“We expect to complete construction and start production of memory chips in the third quarter or fourth quarter of 2014,” Kim Dong Joo, vice president and chief finance officer of Phoenix Semiconductor Philippines Corp., told reporters on Thursday.

 

He said the expansion will give Phoenix Semiconductor the ability to meet the demand from smartphone makers and develop new customers.

 

“Everybody is recovering. Our biggest markets are the US and Europe, and we can see that demand is rising,” Kim said.

 

Once the new production facilities are in operation, Phoenix Semiconductor will have an additional monthly output of 40 million units of memory chips for smartphones and other devices. This will boost monthly output to 65 million units.

 

Only a fifth of company's 15-hectare site in Clark is occupied, and the operations are mainly devoted to memory chips and modules for personal computers, laptops and servers according to the company.

 

Phoenix Semiconductor holds a six-year supply contract with Samsung Electronics Co. Ltd. The contract is valid up to 2017.

 

To fund its Philippine ambition, Phoenix Semiconductor is preparing for an initial public offering on the Philippine Stock Exchange.

 

It is now waiting for the Securities and Exchange Commission to give its IPO the green light, covering 572.186 million shares at P3.76 per shares or P2.15 billion in all.

 

Apart from the IPO proceeds, Kim said the company is committing internally generated funds and an expected loan proceeds for the expansion plan. – VS, GMA News