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SMT & Inspection | August 27, 2007

Correction: Universal Instruments<br>to downsize Chinese operation

evertiq.com on August 20 quoted an EDN report stating that Universal Instruments plans to close a plant in Shenzhen, China. According to VIVA Consulting, a Chinese PR agency who handles Universal Instruments PR in China, the information is not correct. Universal only plans to downsize the Chinese plant instead of closing it.
EDN wrote in the article that the reason for Universal's decision to close the plant was based on quality complaints from customers of its precision instruments. According to VIVA, Universal has never received any quality complaints from customers of its precision instruments. It will downscale its Shenzhen manufacturing operation because it found it not cost-effective to produce the same equipment in two separate sites, ie, in the States and Shenzhen. Therefore Universal Instruments moved the production of the machines back to the US. The Shenzhen site remains an assembly center, sourcing center as well as continuing to produce peripheral products.

According to the EDN report it is not difficult to find a parts supplier in China, but getting the right supplier at the right quality level for SMT equipment is a challenge. Universal did put a large effort into educating the suppliers, which resulted in raised costs and stretched Universal's resources. While the problem was being solved, Universal was losing market shares, EDN stated. According to VIVA, this is totally unfounded. Universal is still working with seven suppliers in Shenzhen with a team of 4 engineers. Universal's engineer's work with the suppliers to ensure quality, VIVA told evertiq.com.

Finally EDN wrote that Universal will not carry out purchasing in China, however VIVA told evertiq.com that this is wrong as Universal is doing sourcing in China. If Universal reconsiders this decision, it will locate its operation in the Shanghai area instead of Shenzhen. Presently Universal does not have such plans according to VIVA.
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