Phoenix Semiconductors suffers slump demand, delays Clark expansion
MANILA, Philippines — The local unit of South Korea's STS Semiconductor & Telecommunications Company Limited closed 2015 with a slump demand for semiconductors due to the the downturn in the economy of China.
China is a major global consumer market and downstream manufacturer of electronics products.
As a result of the slump demand, Phoenix Semiconductors Philippines Corporation (PSPC) told the Philippine Stock Exchange on December 29 that it is indefinitely delaying the expansion of its manufacturing facility at the Clark Freeport Zone in Pampanga.
The development of the P8-billion ($170-million) second phase of the manufacturing facility was initially targeted to start in the second half of 2015, PSPC said.
It was in February last year when PSPC said it plans to expand that plant's capacity for the memory modules and chips demands of new customers.
The P1-billion ($21.25-million) initial public offering of PSPC was supposed to fund its Clark facility’s expansion project.
"The IPO funds remain to be placed in short-term cash facility until such appropriate time of its utilization," PSPC told the local bourse.
Although PSPC has already completed the engineering plans and awarding of the project to contractors, the start of the construction is still on hold because of the current wait-and-see outlook of the semiconductor industry.
PSPC, however, clarified that negotiations with potential customers are still ongoing.
The memory chip maker serves 25% of the requirements of Samsung Electronics Company Limited, its main customer, under a 6-year supply contract that ends in 2017.
Its factory in Clark Freeport Zone produces around 60 million chips every month.
PSPC's parent company STS Semiconductor & Telecommunications is 28.10% owned by Seoul-based Bokwang Company Limited. — Rappler.com