PSPC sets capex, expands facilities dedicated to Samsung

Phoenix Semiconductor Philippines Corporation (PSPC) has allotted

million for its capital expenditure program (Capex) this year and has invested million as of the first semester.

In a disclosure to the Philippine Stock Exchange, the firm said the year’s capex budget is allotted for its existing main factory.

PSPC utilized approximately million from the proceeds of its initial public offering (IPO) in the first quarter of the year while the balance was sourced from internally generated funds from operations.

“The capital program is a key element to securing the growth momentum of PSPC in 2015 and onwards,” said PSPC vice president and chief finance officer Dongjoo Kim.

Of the million capex, Kim said the company spent a total of million for the acquisition of production machinery for branded memory cards and for dual in-line memory modules (DIMM) which increases the output capacity for both product categories.

He explained that aside from the more familiar flash memory cards used for mobile phones, gadgets and digital cameras, PSPC produces memory modules for desktop and server computers.

PSPC has also recently completed the installation of a semi-automatic blister pack production line in its existing Clark Freeport plant which is a packaging line for its complete array of secured digital (SD) flash memory products for Samsung.

The semi-automated process has provided a forward value-added service for the branded SD memory products, as the Company used to just ship loose flash cards without packaging. This new line should be fully operational this month.

Kim said this extension line is a testament to the continued trust and confidence of Samsung in PSPC’s electronics manufacturing capability and efficiency.

Samsung, its exclusive customer, also provides memory cards for branded consumer technology companies such as HP and Apple through PSPC as its OSAT memory products solutions provider.

“When the capex program is completed in the existing facility during the year, production capacity will increase to about 90 million units and should drive the growth in revenues and earnings in the years to come,” Kim said .

The Phase 1 Capex is separate from the billion budget for the construction of the new Phase 2 facility which has been earmarked to put in place manufacturing capacity to cater to non- Samsung global customers.

Negotiations with a number of customers are currently ongoing.

The existing Phase 1 facility is dedicated for Samsung, its sole customer as an outsourced semiconductor assembly and test (OSAT) service, which provided majority of the machine and equipment as its supply chain partner.

PSPC raised the funds for Phase 1 and Phase 2 expansion program from its initial public offering of primary shares amounting to million.

Construction of the Phase 2 facility is expected to commence in the latter part of 2015.