Corporate News

IPO candidate Phoenix to expand Clark operations

Posted on June 06, 2014

PHOENIX Semiconductor Philippines Corp. (PSPC) said it will invest $170 million to expand its manufacturing plant north of Metro Manila.

PSPC Chief Financial Officer Kim Dong Joo said a new facility will rise in the company’s 146,363-square-meter property in Clark Freeport Zone in Pampanga that will be dedicated to the production of memory chips for smartphones and devices.

“Currently, what we are doing are memory chips for personal computers and servers… But the hot products now are smartphones. The future plan will include our plan for smart phones,” Mr. Kim told reporters at a luncheon in Makati City yesterday.

At present, the existing facility can produce 60 million chips every month and primarily serves Samsung Electronics Co. Ltd.’s memory requirements for servers.

With the expansion, PSPC will likewise supply semiconductors for Samsung smartphones. The new plant will have a monthly capacity of 40 million units.

“We are using the Samsung brand because we have a contract with Samsung,” Mr. Kim said.

He added that the company expects orders from North America and Europe to increase as markets in these regions steadily recover.

Construction of the new facility, the official noted, is expected to begin late this year and will likely be finished by the third or fourth quarter next year.

An additional 1,000 jobs will be created to add to the company’s current work force of 1,550 once the new facility is operational.

Mr. Kim said $100 million of the planned $170-million expansion cost will be funded internally, while $50 million will come from debt financing. The remainder could take in some proceeds from a planned initial public offering (IPO) this month.

PSPC, which is 99%-owned by South Korea’s STS Semiconductor & Telecommunications Co. Ltd., plans to raise around P2.15 billion via the IPO by selling 572.19 million shares at up to P3.76 each.

According to the company’s preliminary prospectus filed with the Securities and Exchange Commission, the net proceeds “will be used primarily for the acquisition of new machineries, equipment and other capital expenditures of the company.”

The offering will run from June 16-20. PSPC has appointed BDO Capital & Investment Corp. as its issue manager and lead underwriter.

PSPC is engaged in the manufacture, assembly, testing, and warehousing of semiconductors and memory devices and applications and related products, the company’s prospectus read. -- Daryll Edisonn D. Saclag