LISTED semiconductor maker Phoenix Semiconductor Philippines Corp. (PSPC) said it has started construction of the second phase of its expansion project for its manufacturing facility at Clark Freeport, Pampanga in order to cater to more clients.
In a disclosure to the Philippine Stock Exchange, PSPC said the Phase 2 expansion project is to expand manufacturing capacity in 2017 for clients other than its major client South Korean tech giant Samsung Electronics Co. Ltd.
The second phase of the expansion involves the construction of an 18,000-square-meter (sqm) manufacturing facility and a new 1,000-sqm warehouse as well as the expansion of its power utility building — all set for completion in August this year.
“The commencement of the Phase 2 project is a clear testament to the commitment of PSPC and its major shareholder, SFA Semicon Co. Ltd. of Korea, to continue with its investments and to expand its presence in the Philippines,” PSPC President Byeongchun Lee said.
Lee said PSCP is in advanced stages of negotiations with new customers that will take up the initial production capacity of the manufacturing facility under the Phase 2 project. He said the new facility will also house production capacity for SFA Semicon’s semiconductor assembly and packaging contracts.
He said this is in line with the group’s global manufacturing realignment strategy which plans to see PSPC diversifying to mobile semiconductor products while keeping its strong relationship with main client Samsung.
“PSPC is foreseen to be a manufacturing hub of the SFA group in Asia, providing state of the art semiconductor assembly services to Samsung and other electronics companies around the world,” Lee said.
Construction and foundation works have already started despite the pending finalization of the building’s architectural and engineering plans and the signing of a main construction contract.
After the August completion of Phase 2, the company will ramp up construction of production equipment, ancillary and support facilities.
The Phase 2 expansion will be financed by funds raised from PSPC’s December 2014 initial public offering (IPO) as well as from retained earnings in 2015 and 2016.
The project had been planned to start alongside the IPO but was delayed due to a slowdown in the global semiconductor industry. PSPC now anticipates a recovering global industry in 2017.
Established in February 2011, PSPC is the local subsidiary of South Korean semiconductor giant STS Semiconductor, which supplies memory chips for Samsung. The parent STS Semiconductor also has a presence in China through unit PSTS.
PSPC’s semiconductor products are used in various applications such as memory chips and devices for computers, laptops and servers, and micro SD cards for mobile phones.