Ayala’s IMI sees higher net income this year

Ayala subsidiary Integrated Microelectronics Inc. (IMI) is looking at a P300-to P400-million net income by the end of this year, as against P285 million last year, as the global economy stabilizes and world market activity resumes.

This as IMI president and chief operating officer Arthur Tan said that from being an assembly and test entity founded in 1980, the company is now moving up the value chain and has become a one-stop electronics manufacturing service (EMS) provider assisting original electronics manufacturers (OEMs) in product realization.

According to Tan, during the fiscal year ending December 2001, IMI ended with a P3.7-billion gross income and a P285-million net income, the latter six percent higher than the previous year’s level and defying an industry trend last year of a contraction in bottom line.

Around 60 percent of IMI’s revenues come from its Japanese customers, followed by the Americans with 30 percent, and 10 percent from Europeans. Tan explained that for the last 21 years, IMI has been focused on the Japanese market. "We want to make the pie bigger so that at the end of the day, the three will have an equal share of around 30 percent each," he said.

Tan said that the slowdown in the world communications sector as well as the recession last year was in fact good for IMI since ‘it allows me to catch up.’

He revealed that IMI is now in discussions with some European companies for possible alliances, especially in the field of wireless communications.

The company is also focusing on three major markets – the personal computer business which remains its largest market; wireless communications; and the industrial, automotive, and medical business.

He disclosed that IMI also wants to focus on three growing areas – industrial, automotive, and the medical fields where the engineering requirements are more or less the same. For the industrial and automotive sector, the company is looking at sensor-type of products while for the medical field, IMI is contract manufacturing for several companies worldwide to produce over-the-counter electronics measuring devices like fertility monitoring devices.

IMI is also spending around $1 million this year for applied research and development. According to IMI vice chair and CEO Filemon Berba Jr., the capability to design was thought about as early as five years ago in anticipation of China being a very formidable competition when it comes to labor-intensive industries like electronics.

"This is our way of moving out from exclusively labor inputs to design. It also complements our existing line of business. But government better wake up because even the most efficient companies will have difficulty competing with the likes of China given our high cost of doing business," Berba said.

Meanwhile, IMI subsidiary and design arm Eazix was just chosen by Sharp Electronics Singapore to be a member of the Dream Team, which now has 16 business partners in six continents, that provides customized development services and contract manufacturing in hardware and software design.

The Dream Team combines the marketing and technological expertise of Sharp and that of established design and manufacturing houses like Eazix and IMI. Officials said the partnership between IMI-Eazix and Sharp could potentially catapult locally designed and manufactured electronic components in the global market place.

IMI currently serves some of the leading global OEMs like Toshiba, Hitachi, Fujitsu, APC, Kyushu Matsushita Electric, and Analog Devices.