© TTM Technolgies General | April 30, 2020
TTM Technologies to reconfigure operations in China
TTM Technologies Inc. has announced plans to restructure its Electro-Mechanical (E-MS) Business Unit consisting of three Chinese manufacturing facilities, two in Shanghai (SH E-MS and SH BPA) and one in Shenzhen (SZ).
In multiple phases, SH E-MS and the Shenzhen site will begin ramping down operations as customer obligations are met, with a total cessation likely by the end of this year. The second Shanghai site, SH BPA, will be integrated into the company’s PCB operations, a press release stated. Until now, TTM’s E-MS Business Unit has focused on commercial assembly solutions, with the remainder of TTM’s operations aimed at higher margin PCBs and RF components. SH BPA, which provides backplane assemblies for the networking/communications end market is being retained to improve TTM’s position in the 5G infrastructure market. The SZ facility has provided PCB assembly and systems integration for the automotive market, and the SH E-MS facility has manufactured large enclosures and equipment systems for the networking/communications and industrial markets. Overall, the restructuring is designed to fully leverage TTM’s early engagement capabilities and engineering-based technology solutions by focusing on differentiated higher margin products, the company said in a press release announcing the changes. In the statement, TTM CEO Tom Edman said, “Our strategic intent to exit this business was reinforced by a confluence of recent events including an expropriation notice from a Chinese municipality, US/China trade tensions, and impact from COVID-19. We believe that following this restructuring, TTM will be a financially stronger company with an even greater focus on serving the needs of all stakeholders – customers, suppliers, investors and employees.” For FY2019, the SH E-MS and SZ facilities contributed approximately USD 161 million in revenues. The company is estimating that restructuring costs, including severance package payments and other shutdown costs will come in around USD 17 million, to be incurred over the next 12 to 15 months. Another approximately USD 8 million will be incurred through non-cash asset impairments.