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Malaysia's Unisem sets sight on China market

Posted: 31 May 2010 ?? ?Print Version ?Bookmark and Share

Keywords:Malaysia packaging firm? China expansion? automotive? production assembly?

Eyeing to break out from the crowded IC-packaging arena, Malaysia's Unisem Berhad has outlined its ambitious growth strategy amid robust demand and shortages in the market.

As part of the program, IC-packaging and test specialist Unisem plans to expand in China, develop an automotive expertise and look for acquisitions in the market.

To move upstream and crack new markets, the company is or will roll out higher-end packages, such MEMS, system-in-packages (SIPs), wafer-level chip-scale packages (WLCSPs) and a new leadframe array (LFA) package.

The company also has major growth plans for its various plants in China, Indonesia, Malaysia, Singapore, Wales and even the United States. But its future growth revolves around its new IC-packaging and test plant in Chengdu, the capital of Sichuan province that boasts a population of over 11 million people. Chengdu, a transportation and communication hub in Western China, seeks to become the next major base for the development of ICs, IT and other sectors in the nation.

Intel Corp. owns and operates a giant IC-packaging facility in Chengdu. Semiconductor International Manufacturing Corp. operates a 200mm fab in the area, but there are reports that Texas Instruments Inc. may soon take ownership of the facility.

Malaysia's Unisem, the 10th largest IC-packaging company, began production within its Chengdu plant in 2006. At present, the company is at or near capacity in the 260,000-square-foot plant. Last year, it built another 260,000-square foot facility in Chengdu, which is the phase II portion of the company's expansion plan. Unisem plans to begin operations on that plant by year's end.

The company has three other and separate plants on the drawing board in Chendgu. Over the next five to ten years, Unisem plans to have five plants in Chengdu and spend some $200 million on the expansion plan here, said John Chia Sin Tet, chairman and group managing director for Unisem.

Bullish outlook
Unisem is expanding in Chengdu for good reason. For years, Malaysia has suffered from severe labor shortages. Many electronics concerns in Malaysia must import foreign workers. In Chengdu, however, there is an abundance of highly-skilled workers, making the region attractive for investors.

At the same time, the China government hopes to develop Chengdu "to balance the disparity in the economy between the east and west regions," said Tan Kim Heng, president and chief operating officer of Unisem's Chengdu unit. "Chengdu is the gateway for the western region. Labor costs are lower compared to Shanghai."

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