CHINA’s economic downturn has weighed on the operations of listed firm Phoenix Semiconductor Philippines Corp. (PSPC), forcing the Philippine exporter to defer its planned P8-billion expansion project.
In a disclosure to the Philippine Stock Exchange on 2015’s last trading day, PSPC said it is delaying the phase 2 of its manufacturing facility project, which it had committed to construct in the second half of 2015, in line with its initial public offering in December 2014.
The project is programmed to expand the company’s production capacity for memory modules and chips to be earmarked for new customers.
PSPC said it has already completed the engineering plans and the awarding of the project to general and specialty contractors.
But it is halting the project because demand for semiconductors has gone down, particularly in China, which a major consumer of its products abroad.
“The temporary deferral is in line with the slowdown in the demand in semiconductors as a result of the downturn of the economy in China, a major global consumer market and downstream manufacturer of electronic products,” PSPC said.
But the company said it is now negotiating with potential customers, reflecting a wait-and-see attitude of the semiconductor industry.
Under the terms announced in its offering prospectus, an estimated sum of P423.54 million had been allotted from the P467.67 million net proceeds from the primary tranche of PSPC’s 2014 IPO.
This allotted amount, the company said, would be for the construction of a new manufacturing building and structure costing P134.25 million and the acquisition and installation of production equipment and machinery costing P289.28 million, as disclosed to the PSE and the Securities and Exchange Commission in September 2015.