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STATS ChipPAC closes Thai plant

Posted: 03 Feb 2012 ?? ?Print Version ?Bookmark and Share

Keywords:Thai flood? wafer packaging? WLCSP?

Semiconductor test and advanced packaging service provider STATS ChipPAC Ltd has revealed that it will no longer continue the assembly operations of its facility in Thailand.

The facility, located at the Navanakorn Industrial Estate in Pathum Thani, was severely damaged during last year's massive floods that crippled Thailand for several months. The damages were so extensive that economic restoration is no longer possible.

Partial operations in test and wafer level chip scale packaging (WLCSP) will be supported from the Thailand facility until the third quarter of 2012. STATS ChipPAC will continue to shift production to its other manufacturing locations in Singapore, Korea and China to support demand from the customers affected by the disruption of the Thailand Plant.

According to the company, the suspension of operations at the Thailand plant accounted for a 7.6 percent revenue reduction for 4Q11 compared to 3Q11.

"The decision to not resume full operations in Thailand was painful but unavoidable given the significant damage to our Thailand assembly operational environment that severely affected our ability to support the ongoing demand from our customers. While the Thailand plant was suspended, we shifted production to other manufacturing locations in order to support ongoing customer demand. The extensive equipment and facility damages and the continuing shift of production to the company's other manufacturing locations in Singapore, Korea and China have resulted in substantially reduced capability and scale of the Thailand plant," said Tan Lay Koon, CEO, STATS ChipPAC. "The facility restoration period and the extensive requirements of resuming full production in the Thailand plant make it uneconomical for the company to return to full manufacturing operation."

As the company focuses on shifting production to other manufacturing locations in Singapore, Korea and China to support demand from affected customers, approximately 1,250 employees, representing 12 percent of STAS ChipPAC's global workforce, will be affected by the plan to not resume assembly operations and to maintain partial operations in test and WLCSP. The company will ensure that fair severance benefits and other support will be provided to the affected employees.

As a result of the announced plan for the Thai facility, the company has incurred flood related charges totaling $55.5 million comprising goodwill impairment ($24.5 million), plant and equipment impairment ($16.3 million) and other related charges ($14.7 million) in the fourth quarter of 2011. STAT ChipPAC will file a property damage and business interruption claim with its insurers during the first quarter of 2012.





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