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Electronics Production | September 19, 2011

'Our biggest growth potential is in Asia'

Naturally we also talked to the Siplace management about the company. Günter Lauber has provided some insight into future growth plans.
What investments are planned for the locations in Europe and Asia?

As one of the world's leading SMT equipment manufacturers, ASM Assembly Systems is represented worldwide with its own Siplace sales and service offices. For years, the Siplace team reinvested more than 8% of revenue in research and development (R&D). Increasingly, we invest the majority in software and process-oriented solutions such as our flexible and highly efficient mounting concepts.

In Asia, we have our own cluster organisation in China and Southeast Asia – close to our customers there. Through the merger with ASM Pacific Technology, our regional position has improved significantly; especially to Asia. We work – together with customers – on specific developments of machine platforms and also on local variations. Focus of our investments in Asia is the development of our sales & service network as well as on consulting services.

While the ASMPT Headquarters are in Singapore, the Siplace headquarter – with development and production teams – are located in Germany. Just over two years ago, we have completely upgraded and modernised our machine park here in Munich with a million Euro investment.

In recent years, often mocked as a 'sure-to-die' or 'end-of-range'model, electronics manufacturers have positioned themselves anew in the West. They score points with a highly flexible production, excellent manufacturing quality and are integrated into the development and value chain of their customers. The competitive position of European and American electronics manufacturer has improved in recent years. Here, we are investing in new service concepts and advanced process solutions to support our customers with more flexibility and automation.

Which market will be captured next?

Regionally there are only a few markets in which Siplace is not already present and recognised as a major supplier. It is somewhat different when we differentiate the markets from high-performance solutions in the premium segment all the way down to the low-cost solutions for smaller productions.

Here we see – especially in China and other parts of Asia – an increasingly strong interest in our efficient premium solutions. New customers, such as automotive and medical device manufacturers, provide Asian manufacturers new tasks and requirements. This in turn requires them to invest in much more powerful, more accurate machines and processes.

Here we can score as a premium supplier. Looking at the sales distribution between low-end and high-end placement equipment, so has the mix in – particularly – China almost reached that of the American region. That means that out of 4 newly installed placement machines, 3 are from the high-end segment.
On the other hand, we want to include – without sacrificing the quality of our brand – the many small and medium-sized manufacturers in Asia, Eastern Europe or North Africa. So we are working on new sourcing strategies and specific alternative solutions to reduce costs further to make our portfolio more attractive to small and medium-sized players.

Where do you see your biggest growth potential?

Our biggest growth potential lies in Asia – hence the merger with ASM Pacific Technology is highly beneficial. We have an extremely strong position in Europe and from this we want to grow in Asia. Here we are now particularly successful with installations for large, internationally operating EMS manufacturers.

However, in future we will also concentrate our efforts also on providing solutions to the regional, small and medium-sized electronics manufacturers. Many of these companies are founded and run by knowledgable and practice-experienced technicians. They know about the technical superiority of our solutions, 'Engineering by Germany' and our quality of service. We have to show them that investments in superior technology has a positive effect on their yields and competitiveness.

Many European countries are 'pushed for money'. Will there be a second downturn?

It is true that the debt crisis in Europe poses some risks. But currently we are experiencing in Europe and particularly in Germany, a strong overall economy and a boom in electronic manufacturing. The reason? More and more products – medical, industrial and automotive sector – will have intelligent electronics systems on the inside. As a manufacturer with many years experience in the electronics industry, we also know how quickly at demand can vanish again. The electronics industry will continue to experience these abrupt ups and downs.

What about for Siplace from now?

The Siplace team has lived hard times – with extreme market fluctuations, far-reaching restructuring and then ultimately the sale. With the takeover by ASM Pacific Technology, peace has finally returned. Especially as the Siplace team has been incorporated in the ASM Group nearly complete, as an independent organization and with the existing management still in place. We could therefore focus on our customers, products and markets in recent months and could therefore significantly benefit from the upturn in the electronics industry.

As part of a listed company, ASM Assembly Systems and the Siplace team have to comply with stringent requirements in terms of information on business conditions. Publicly known is that Siplace has already contributed positively to earnings of the group and that many analysts evaluate the takeover as an excellent strategic move with great potential.

Should there be a second downturn, how will Siplace successfully prevail?

Well, that would not really be the second, but already the umpteenth downturn in the electronics industry. Our industry is known for their rapid ups and downs. One company alone cannot do something against these cycles – it can only prepare for it as good as possible. We now have an extremely slim and powerful cluster structure.
Our investments in R & D, which we have continued sensibly in the recent crisis, now bear fruits: With platform innovations such as our Siplace SX and innovations in software and services we offer electronics manufacturers currently the best and most modern solutions to market demands. The Siplace team has a worldwide presence (always close to its customers). This 'personal' service is acknowledge and rewarded and – as already proven – also in difficult times.

The ASM Group is an economically stable partner who has experienced the cycles in the electronics industry for many years and – as you can see from the balance sheets – has handled them also successfully.

One thing is clear: ASM and Siplace have not only survived the recent crisis, but both came out stronger. And frankly speaken, even if we must be vigilant, our current concern is to provide our customers with the best product, delivery and service quality, thus strengthening their and our competitive position.

In which regions does Siplace sees the biggest sales potential?

Currently, we still benefit greatly from our position and the strong economy in Europe. The greatest potential for the future, however, undoubtedly lies in Asia. Not only because the market in China and other Asian will represent 75% of the total world, but also because we have – after the merger with ASM Pacific Technology – significantly improved market access.

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