Phoenix Semiconductor seals deals for Clark plant expansion

MANILA, Philippines – Korean-owned semiconductor company Phoenix Semiconductor Philippines Corporation (PSPC) signed contracts for the expansion of its manufacturing plant in Clark Freeport Zone, Pampanga, to cash in on the global semiconductor industry and continue on its recovery path in 2017.

PSPC told the Philippine Stock Exchange (PSE) on Tuesday, February 28, that it signed the following deals with Welcron Hantec Philippines Corporation:

• construction management contract worth $1.67 million
• construction equipment supply deal worth $17.56 million
• purchase agreement worth $3.1 million

PSPC’s Phase 2 expansion project involves the construction of a manufacturing building with an initial production footprint of 18,000 square meters (sqm), a 1,000-sqm warehouse, and an expansion power utility building within its 15-hectare facility.

PSPC said it expects completion of structural and electro-mechanical construction works for its main process building, power utility building, and overbridge structure not later than August 31, 2017. 

Under the contract terms, Welcron Hantec will undertake construction works and services for the Phase 2 main building with an estimated production floor area of 18,000 sqm, the power utility building, and the overbridge structure.

It will also supply the construction equipment and materials for the expansion project.

“The equipment and materials shall be shipped from South Korea or other countries at free on board (FOB) arrangement,” PSPC said.

Welcron Hantec Philippines is the local subsidiary of Welcron Hantec Company Limited of South Korea.

In addition to the two construction contracts, PSPC signed a purchase agreement with Welcron Hantec for the supply of the water demineralization and waste water treatment systems for the Phase 2 production facility. 

“Semiconductor production facilities require deionized, high-purity water free from minerals and ionic contaminants. The wastewater treatment facility, on the other hand, is in strict compliance with environmental regulations,” the listed semiconductor firm said.

PSPC president Byeongchun Lee had said that the new facility will house production capacity for SFA Semicon’s semiconductor assembly and packaging contracts.

This is in line with its global manufacturing realignment strategy, which will lead to PSPC diversifying to mobile semiconductor products.

Financing for the construction of the initial building of the expansion project will be sourced from the company’s initial public offering in December 2014 and from retained earnings from past years of operations.

The expansion project was originally scheduled for implementation in 2016, but it was delayed due to the slowdown in the global semiconductor industry. – Rappler.com