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Cirtek sets expansion, eyes IPO

Cirtek sets expansion, eyes IPO

Filipino-owned semiconductor firm Cirtek Electronics Corp. projects revenues to hit $50 million in two years on the back of strong demand for electronics products

Jorge Aguilar, executive vice president and general manager of Cirtek, said revenues from exports are expected to grow to $42 million this year from $34 million in 2010, and would jump to $45 million next year.

The company, a subcontractor for semiconductor and test assembly for integrated device manufacturers, is embarking on an expansion program that would enable it to generate 1.5 billion shipouts in four years.

Aguilar said shipouts are expected to hit the billion mark this year from 800 million units in 2010.

He said the expansion would double the current workforce from the present 1,400.

Holding firm Cirtek Philippines Holdings Inc is raising $10 million through an initial public offering of its shares to bankroll the expansion.

This would make Cirtek the first 100-percent Filipino-owned semiconductor firm to independently list in the Philippine Stock Exchange, Aguilar said

It also joins the Ayala-owned Integrated Microelectronics Inc and Ionics Inc in the roster of electronics firms to be listed in the exchange.

Aguilar said Cirtek is the only 100-percent Filipino-owned outsourced assembly and test firm now operating in the Philippines.

Cirtek is owned by businessman Jerry Liu.

According to Antonio Callueng, senior director for sales and marketing of Cirtek Electronics, said the company is eyeing listing 35 percent of the company’s shares.

BDO Capital and Investment Corp has been tapped as underwriter.

Callueng said the decision to go public is driven by the management’s objective to grow the 26-year old company.

“Being publicly-listed indicates one’s reliability,” Callueng said.

Callueng said Cirtek plans to build a third building at its plant in Laguna Technopark and install additional equipment and machinery to accommodate the expansion.

The new building will add 180,000 square feet of manufacturing space. The new equipment will be composed of semi-auto and automatic machineries that will allow the company to accept additional volume orders from existing and new products. This is expected to double current production capacity.

Callueng said the assembly and test business has not been affected by the Japan quake and tsunami.

Callueng said Cirtek’s first quarter revenues in fact exceeded projections by 5 percent.

“There is no slowdown in orders,” Callueng said.

This year’s growth, he said, is driven by organic growth; captive line demand and technology development.

Callueng said the robust demand for consumer electronics will continue to drive integrated chip manufacturing.

“The product cycle of consumer electronics like phones, laptops and other devices is very short and manufacturers would have to come up with new ICs, new solutions and should continue to innovate to keep up with the challenge,” Callueng said.

Companies like Cirtek are tapped for assembly and test by IDMs to boost their capacities and enable them to deliver to original equipment manufacturers.

Although not the biggest in the Philippines, Cirtek is partner of major American electronics firms.

Its customers include Maxim Dallas, Semtech Electronics, ST Microelectronics, International Rectifier, Borns of UK, among others.

In 2010, the company and its subsidiaries posted a net income of $ 3.5 million. As of December 31, 2010 Cirtek and its subsidiaries had total assets of US$ 35.6 million and total liabilities of US$ 13.4 million.


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