Phoenix Semicon to expand

MANILA, Philippines - Phoenix Semiconductor Philippines Corp (PSPC)., a unit of a South Korean semiconductor giant, is spending $172 million to expand its production facility in Pampanga.

Kim Dong Joo, PSPC vice president and chief finance officer told reporters yesterday the firm has allotted $170 million to construct two new buildings within its 15-hectare site in the Clark Freeport Zone.

“We expect to complete (construction) and start production of memory chips (there) in the third quarter or fourth quarter of 2014,” Kim said.

Upon completion of the buildings, the firm expects to produce 40 million units of memory chips for smartphones and other smart devices per month.

Kim said the remaining $2 million will be used to increase the firm’s current monthly production output of 60 million units to 65 million units by August, as it starts to manufacture memory chips for smartphones and other smart devices.

At present, the firm only produces memory chips and modules for personal computers, laptops and servers.

The firm has a six-year contract to provide products to Samsung Electronics Co. Ltd. until 2017.

Kim said the firm is expanding its production facility to be able to cater to the strong demand for smartphones, as well as get new customers.

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

PSPC intends to fund the expansion plan by using the proceeds of its upcoming initial public offering.

It is currently seeking the Securities and Exchange Commission’s approval to sell 572.186 million shares at a maximum price of P3.76 apiece for a total of P2.15 billion.

Kim said the firm will also be securing a loan and using internally generated funds to support its expansion plan.

Kim said the firm aims to generate $234 million worth of sales this year from just $210 million last year.

“If our expansion will be successful, then there will be more investments in the future,” he added.

PSPC is a unit of South Korea’s STS Semiconductor and Telecommunications Co. Ltd.

While the manufacturing facility in the Philippines is focused on memory products, STS has manufacturing facilities in Korea and China which manufacture other semiconductor products.