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Trailblazing trends in manufacturing services

Posted: 16 May 2005 ?? ?Print Version ?Bookmark and Share

Keywords:arthur tan? ceo? president? ems? odm?

Twenty-five years ago, Philippine-based Integrated Microelectronics Inc. started by providing electronic assembly services. It has since come a long way, evolving into a provider of electronics design and manufacturing services intended for various applications.

The man at the helm, imi President and CEO Arthur Tan, affirms that it is expected of companies to excel in the local market first before moving to become a regional player.

After joining IMI in July 2001, Tan led the company into strategic corporate changes that boosted IMI's global competitiveness, enabling the company to offer a one-stop-shop solution to customersi.e. from product design, prototyping and supply chain management to complete box-build solutions.

Tan is also managing director of Ayala Corp. and chairman of the Advanced Research and Competency Development Institute. He is also a board member of the Semiconductor and Electronics Industries in the philippines Inc. (seipi), the largest organization of foreign and local semiconductor and electronics companies in the country. He recently spoke with EE Times-Asia on industry trends, particularly in the original design manufacturing (ODM) and electronics-manufacturing services (EMS) sectors.

As time-to-market becomes more critical and product features become more demanding, original equipment manufacturers (OEMs) are beginning to focus more on how products are designed and manufactured, while EMS providers such as IMI offer total solutions to OEMs. Part of providing complete solutions is the move for EMS companies to acquire design capabilities as well.

IMI gracefully endured through the changes in the industry. Today, the company's capabilities are in line with the wireless communications segment, such as incorporating Bluetooth, Wi-Fi, GPS and Zigbee functions into automotive and industrial products, and offering services such as customizing manufacturing processes for electronic companies.

"We struggled in the beginning because we weren't sure how we were going to position the company. In the end, we found our niche; we are good at supplying our OEM partners with layout and additional engineering services in terms of characterization, software and firmware development, as well as prototyping," Tan said.

In the last five years, pure manufacturing players began to acquire some design capabilities and expertise. Tan sees it as a natural progression of electronic products as time-to-market becomes more critical and products become more complex.

Transitioning from semiconductor component assembly, Tan said that it is important for companies to remain focused on their target segments.

Bigger picture

Most of IMI's customers are Japanese firms. Tan says Japan has always been an export-driven economy based on electronic products. IMI is in the best position with these firms as Japanese players are beginning to realize that outsourcing is the key to accelerate growth.

Tan looks closely at the integration model that Japan follows and he is positive that IMI has not completely dismantled this. "Japan still has control over a lot of major electronics industry operations, although some operations have moved out of the country to adopt low-cost areas of production," he said. Tan relates this situation with the success of South Korea's Samsung, which is moving swiftly in product development and has been aggressive in venturing into unproven and untapped technologies.

In 2004, IMI started assembling high-definition, low-power LCD modules used in cellphones for a major LCD module maker. Its design arm, Eazix Inc., likewise launched its GPS receiver and wireless multimedia adapter platforms. Adding another star to IMI's badge is earning an ISO/TS 16949 quality standard certification to serve the automotive electronics segment.

IMI's most recent acquisition of California-based Saturn Electronics & Engineering Inc. shows how aggressive the company is on its quest to become a global player. IMI will take advantage of Saturn's facilities, which include a technology and design center, prototyping and manufacturing facilities with SMT chip-on-flex and flip-chip-on-flex assembly capabilities, and a program management center.

"The acquisition of the EMS/ODM assets of Saturn in Tustin enhances our capabilities in the areas of product design and development, manufacturing process development and flip-chip assembly, enabling us to provide competitive solutions to our customers," said Tan.

Tan led IMI to establish strategic alliances with various companies, including EMS firms such as U.S.-based Pensar Electronic Solutions, U.K.-based Hansatech and Japan-based Embedded Linux Technology. IMI also joined the international pool of electronic products designers and developers called Sharp Dream Team in 2002, as they entered a strategic partnership with Sharp Electronics Singapore.

Tempered outlook

For Tan, 2005 will be a "tempered year" for the global electronics market, although he is positive that EMS firms will take the spotlight this year because they will better identify their key markets. He also sees an upsurge in the data side of the industry as corporations upgrade their equipment-based IPs.

Tan is excited about the establishment of a representative office in Tokyo, Japan this year and a manufacturing plant in Munich, Germany in 2007. Tan also envisions further expansion in the United States. "We are serious in fortifying our global presence."

IMI may be the same as other EMS companies, but Tan believes that it all boils down to how a company relates, business- and technology-wise to its client companies.

- Reden Mateo

Electronic Engineering Times-Asia

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