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Electronics Production | January 10, 2011

Günter Lauber: 'A new era for Siplace'

On January 7, the former Siemens subsidiary officially became a part of ASM Pacific Technology. Under the new name ASM Assembly Systems, a new era will begin for the Siplace team. Siplace CEO Günter Lauber talks about the status of the integration process and management’s plans for the future.
Part 1: Mr. Lauber, the announcement of the Siplace sale in the summer of 2010 made it sound as if the Siplace team and ASMPT were a match made in heaven. How do things look today? They look excellent. Siemens indeed had not considered us to be part of its core activities for quite some time. As a result, the sale was certainly predictable. Let me stress, however, that our colleagues at Siemens learned from the past and provided extremely professional support throughout the development of this deal. In ASMPT we found an industrial investor who is intimately familiar with the extremely dynamic and cyclical electronics industry and is obviously very comfortable in this environment. We, too, were able to prepare for this transfer, both mentally and by restructuring ourselves and adopting a very lean and flexible global cluster organization. Most importantly, however, the management and the employees of Siplace and ASMPT place similar emphasis on innovation and quality. In short: We fit well together, as has become even more apparent over the last very hectic and active months. Despite all the hard work created by the transition, we are looking to the future with a great deal of enthusiasm and confidence. The Siplace brand is globally known. What impact will the acquisition have on the product brand? Siplace is indeed not just well established and known, but our customers and other market players associate it with positive characteristics such as quality innovation, technological leadership, productivity, good service and the Siplace team’s high level of commitment. Our team continues to feel obligated to the Siplace brand and wants to make it even stronger together with ASMPT. Siplace remains our brand, and we will continue to promote it as ASM Assembly Systems. How did your customers respond to the purchase? Did you encounter any critical remarks or even problems in concrete projects? No, we did not encounter any problems. Quite the opposite was true: The takeover by a successful industrial investor and the obviously highly professional way in which the deal was prepared and executed received very positive responses. Many customers actually congratulated us personally, because they view this deal as a strategically significant step in protecting the future of one of their most important technology partners. Let me praise the communication between all three parties – Siemens, ASMPT and our own team – in this context. We communicated quickly and openly with each other, and the entire team was available at all times to answer customers’ questions. It was also helpful that the customers’ contact persons remained the same all over the world. The results of our latest customer satisfaction survey reflect the benefits of this approach. Results like these give me and the entire Siplace team confidence. We also know, however, that much of it is premature praise which we have yet to earn. We must meet the high expectations of our customers, which is another reason why we did not stop or throttle back our R&D activities or the development of our new software and service concepts during the crisis. The extra workload might have been exhausting, but everyone on our team wants to meet the high expectations of our customers. The interview will print as one (single) document. Part 2: Up to this point, ASMPT has grown organically, i.e. without any acquisitions, and with machines and systems that are positioned upstream from the SMT placement process, which is Siplace’s domain. Is that an advantage or a disadvantage Part 3: OK, there will be cooperation in sales. What about the production area? Are there any changes planned? Part 4: What about the employees? How are they responding to the new situation and their new colleagues? Part 2: Up to this point, ASMPT has grown organically, i.e. without any acquisitions, and with machines and systems that are positioned upstream from the SMT placement process, which is Siplace’s domain. Is that an advantage or a disadvantage? ASMPT has advanced in only a few years to become a leading supplier of machines and systems in the chip assembly, bonding and packaging fields while these markets were developing and could be conquered with internal resources. In the meantime, the entire electronics production field has evolved into a mature and highly competitive market. Entering into adjacent markets such as SMT placement from nowhere and only with your own resources would not be advisable. That's why the purchase of Siplace makes so much strategic sense for ASMPT. In the future, the back-end processes being served by ASM’s machines will increasingly merge with the SMT placement processes. Together, both ASMPT and Siplace are better positioned for this development than their competitors. Customers want efficient solutions that require experience and skills in both the back-end and front-end segments of electronics production. ASM and Siplace will be able to offer these in the future. And let’s not forget that the two companies also complement each other in their regional focus. ASMPT has most of its customers in Asian markets, while Siplace contributes its market leadership in Europe, the Americas and with global key accounts. When managers talk about synergies in connection with a merger or acquisition, they usually mean saving costs by eliminating redundancies. With our two companies it’s different: the acquisition of Siplace focuses on generating growth for both companies! And this is why Siplace will operate as a business unit within ASMPT? Yes, there are many good reasons for this kind of integration. The cluster organization of the global Siplace team has proven to be lean, flexible and extremely effective. Our customers really like it. For WK Lee, the CEO of ASMPT, this was a major reason to keep this structure in place. The global and regional Siplace teams worked hard on the development of this structure in the Siplace Excellence programs of recent years. We should be proud that this structure will remain in place. Our new name is ASM Assembly Systems, but as far as our operations are concerned, we can start out full speed ahead without the loss of momentum that you see in so many other mergers or acquisitions. The decision to integrate Siplace and its cluster organization as a separate business unit with all its experienced global and regional managers was greeted very positively by our customers. It eliminates their fear of friction and of losing familiar contact persons. For example, our development and customer projects continued with their usual quality and efficiency while the preparations for the official closing of the deal were going on. Operationally, the acquisition has relatively little impact, for which we can thank not only the hard work of the entire team, but the good structural decisions which were made as part of the integration process. Efficient structures and a good strategic position, however, are only the beginning. At the end of the day, we must earn our success in the market each day anew with successful customer projects. But what will change? ASMPT certainly wants to generate profitable growth with SIPLACE. How do they want to achieve this? Now that we are part of a group that wants to grow within our industry, a lot will change for us. We are much more at the center of attention than we ever were when we were part of Siemens. As an industrial investor, ASMPT considers innovation and high product and service quality to be the most important keys to success in the market. ASMPT reinvests 8-12% of its total sales in research and development each year – this is another area where both companies have very similar philosophies. We will continue on this successful path of innovation based on customer requirements and unveil more new machine models and platforms to the market in the near future, including variants that are designed for the specific challenges in Asian production environments. The good customer contacts of our new colleagues at ASMPT will also play a significant role in these endeavors. Our sales and service organizations will remain separate, but that does not preclude working jointly with and for our customers. Our goal is to significantly increase our market share in Asia not only with large, international key accounts, but among the many medium-sized enterprises as well. The interview will print as one (single) document. Part 3: OK, there will be cooperation in sales. What about the production area? Are there any changes planned? Part 4: What about the employees? How are they responding to the new situation and their new colleagues? Part 1: Mr. Lauber, the announcement of the Siplace sale in the summer of 2010 made it sound as if the Siplace team and ASMPT were a match made in heaven. How do things look today? Part 3: OK, there will be cooperation in sales. What about the production area? Are there any changes planned? ASMPT is known among its customers for its outstanding price-performance ratio and the high quality of its products. The company has lots of experience in manufacturing machines and systems and produces with a deep level of vertical integration. These skills will now be available for us “in-house”, so to speak, and we should put them to good use for the benefit of our customers wherever it makes sense. For example, a joint team is already working on improving our sourcing. Where can we reduce our component costs further? Where can we take advantage of economies of scale by purchasing the same or similar components? We expect the answers to these questions to deliver concrete improvements and components cost reductions. The final assembly and quality control will remain in our recently upgraded, highly efficient Siplace plant in Munich and in our Siplace factory in Singapore. Does the official closing mean that the acquisition has been fully implemented everywhere? We had hoped to have all the legal requirements completed in all regions by today. And we almost succeeded. Only in China will the formalities take a little longer. In this country, the Siplace team will have to continue operating under the Siemens name until about the middle of the year. But these are nothing but formal details. The impact on our customers is essentially nil – it doesn’t really make any difference to them whether their local Siplace representative’s business card says Siemens or ASM. Where do you personally see additional room for improvement? Over the short term, there are several areas. The success of our new platform also has its drawbacks, because we enter the new year with a significant backlog. That other suppliers find themselves in a similar situation is no excuse. We are working hard to return to the level of delivery schedule compliance our customers expect and are accustomed to. In the software field, we are working to make the full functionality and power of our machines even easier to use. Since customized services are becoming increasingly important for our customers, we set new standards with our new service concept, which we will roll out worldwide over the coming months. And let’s not forget that our customers also went through a very serious crisis. We must now help them with powerful Siplace solutions and high-quality services to "ride" the momentary wave of demand in order to compensate for the profit declines or even losses of recent years. The most sustainable improvements, I believe, are of a more medium-term and long-term nature. We will surely be able to reduce costs in purchasing, but targeted product development will provide the greatest cost impact. Partly due to our focus on the European market, we are currently known mostly for our high-end and mid-range machines. This is a position which we want to maintain under all circumstances and with the necessary amount of technical innovation this requires At the same time, however, we also want to be able to offer machines that have been adapted to the needs of smaller production environments in emerging Asian regions. It is our declared goal to expand our product portfolio in this direction, and this is where I expect our relationship with ASMPT and its experience in Asia to lead to optimized machine designs and new platforms. The interview will print as one (single) document. Part 4: What about the employees? How are they responding to the new situation and their new colleagues? Part 1: Mr. Lauber, the announcement of the Siplace sale in the summer of 2010 made it sound as if the Siplace team and ASMPT were a match made in heaven. How do things look today? Part 2: Up to this point, ASMPT has grown organically, i.e. without any acquisitions, and with machines and systems that are positioned upstream from the SMT placement process, which is Siplace’s domain. Is that an advantage or a disadvantage? Part 4: What about the employees? How are they responding to the new situation and their new colleagues? There were some concerns, of course. Not all acquisitions are successful, and ASMPT was completely unknown to many of our employees, particularly in Europe. Some of our people in Asia were afraid that the local Siplace units would simply be swallowed up by ASMPT. As our employees got to know the management, the team and the culture of ASMPT, however, these concerns were eliminated. CEO WK Lee and other top managers of ASMPT took the time to introduce their company to our people in several regional meetings. The decisions regarding the deal were made quickly and always complied with – in strong contrast to the negative examples from other acquisitions. Each party tried to be transparent. As a result, it quickly became clear to each employee what this deal will mean for them and their personal environment. Our management team will remain in place, both globally and regionally, which again demonstrates that the ASMPT management team places great value on consistency and sustained growth. To build additional bridges between the companies, we quickly set up a few initial joint projects. In their meetings, our engineers realized quickly that ASMPT loves innovation and technology. Our buyers saw quickly that for ASMPT quality comes first, costs second. Joint customers praised the quality of ASMPT’s support and service to our sales teams. And ASMPT’s employees probably had the same kind of experience. In the meantime, we see the beginning of more personal relationships, the joint teams work together in a very trusting atmosphere, and in our offices the new spirit of optimism is downright palpable. Of course, the Siplace team is not naïve – any takeover harbors risks, both collectively and individually. But the majority realized the great potential of this new company, and everyone knows what benefits we can generate for our customers if we are competitive over the long term and allowed to grow while being profitable. And the Siplace team’s outlook is better than ever before in all these matters. Believe me, the Siplace team is working to seize these opportunities. The company name, our e-mail addresses and a few account numbers may change, but in terms of its operations the Siplace team stands ready to move full speed ahead under the banner of ASM Assembly Systems. The interview will print as one (single) document. Part 1: Mr. Lauber, the announcement of the Siplace sale in the summer of 2010 made it sound as if the Siplace team and ASMPT were a match made in heaven. How do things look today? Part 2: Up to this point, ASMPT has grown organically, i.e. without any acquisitions, and with machines and systems that are positioned upstream from the SMT placement process, which is Siplace’s domain. Is that an advantage or a disadvantage? Part 3: OK, there will be cooperation in sales. What about the production area? Are there any changes planned?
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