Cirtek to buy Thai electronics firm
Major supply contracts to boost 2013 earningsBy Paolo G. Montecillo |Philippine Daily Inquirer
Laguna-based semiconductor firm Cirtek Holdings Philippines Corp. is poised to post record profits in 2013 as it prepares for more acquisitions and another major supply deal with a big client from the United States.
In a statement at the weekend, Cirtek announced it was “all set” to acquire a Bangkok-based semiconductor assembly and test company. The identity and latest terms of agreement would be disclosed in due time, it said.
We are acquiring a company that has an excellent reputation for product quality and better-than-industry cycle time,” Cirtek said.
The company added that the Thai firm would complement its existing services, particularly in the areas of high-volume, “mature packages.” This would mesh well with Cirtek’s strength in intricate, customer-specific packages, the company said.
The acquisition would also allow Cirtek to get top-tier customers, as the Bangkok company has several big clients the company can add into its portfolio for future growth.
And with Bangkok as a favored hub for semiconductor assembly and test activities, the acquisition would give Cirtek so-called “site redundancy” to ensure that operational disruptions are minimized.
Cirtek said that with additional investment in production equipment, the Bangkok company has the potential to generate sales turnover of over $40 million over the next three years.
In a separate announcement, Cirtek said it had signed a memorandum of understanding with a major US semiconductor company for Cirtek to supply volume requirements.
Under the deal, still subject to business and market conditions, the US company commits to load business to Cirtek from 2013 to 2017. Based on the business forecast given to Cirtek, the potential value of the business over five years is estimated at $68 million.
“With these new developments, Cirtek is confident it will achieve the 25-percent sales growth for 2013 it forecast last week,” the company said. “A 25-percent growth for the full year is very achievable.”