United Test & Assembly Center Ltd (UTAC) is expanding its operations in Thailand by setting up its third plant in the country.
UTAC, headquartered in Singapore, provides semiconductor assembly and testing services for a range of integrated circuits, including mixed-signal, memory, logic and radio-frequency ICs.
Production at the third plant, called UTL3, is expected to start in the second half of 2007. Located near UTAC's existing operations, the 29,100 sq m UTL3 facility will house the test operations and distribution center of UTAC's Thailand subsidiary, UTAC Thai Ltd (UTL). UTL, formerly NS Electronics Bangkok Ltd, was bought by UTAC in June 2006 for US$175 million.
The acquisition is expected to create synergy between UTAC's operations in Thailand and Singapore. With the acquisition, UTAC Singapore will focus on substrate-based packaging, while its Thailand plants will optimize resources to consolidate leadframe-based packaging activities.
UTAC is eager to strengthen its presence in Thailand. US$100 million has been set aside for supporting the company's Thailand operations over the next three years. The Thailand operations now have a headcount of 4,000 staff, of whom 1,000 will work for UTL3.
High Level of Integration
According to Lee Joon Chung, UTAC's group president and CEO, the Thailand operations have traditionally been stronger in assembly rather than in testing, with their key strength resting in the provision of QFN packaging services. UTAC hopes the acquisition will expand its packaging portfolio quickly and enable it to lower its manufacturing cost.
"To a large extent, UTL will continue to operate independently," said Lee. He added that the acquisition would achieve "a higher degree of integration" in the areas such as information technology (IT), financial reporting and corporate governance, purchasing, coordination of sales and marketing activities, and sharing of best practices across the UTAC Group.
Generally speaking, UTAC derives its revenues more from test services than assembly services, although it strives to strike a balance between the two. As for 2007, Lee plans to "leverage on the existing and enhanced strengths of [UTAC's] operations in individual locations" and to deploy resources more effectively.
"We expect the UTAC Group to continue seeing a good balance of customers and business from both test and assembly services, and to provide a strengthened set of service offerings," said Lee. He added that UTAC's operation in Thailand is an essential part of the company's global operations and hence UTL's production operations will be aligned with the group's overall business objectives in the years ahead.
by Adeline Ong
Nikkei Electronics |
Nikkei Monozukuri |
Nikkei Automotive Technology |
|---|---|---|
 |
 |
 |
| The magazine for electronics designers and managers. | Design You Won't Regret - How to Reduce the Risk of Accidents | The comprehensive automotive technology magazine. |
Copyright © 1995-2012 Nikkei Business Publications, Inc. All rights reserved.
All editorial content and graphics on this Web site may not be reproduced in whole or in part without the express permission of the copyright owner.
