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SPEL plans to double capacity of ATMP unit
(The Economic Times - Hyderabad- Nov 01, 2007)

SPEL Semiconductor, an integrated circuit (IC) assembly, testing and packaging (ATMP) company, is planning to expand the capacity of its facility in Chennai. The company is also looking at raising about $20 million in the first quarter of next fiscal to fund its plans.

“At present we have the capacity to assemble and test over 420 million ICs a year. By January, we will increase the capacity by 30% at an investment of $5 million. We are also looking at investing another $20 million by August next year to double the capacity,” said Sam Varghese, CEO of SPEL.

For the initial expansion, the company has already secured around $5 million through debt in the form of bank loans. “Another $20 million will be raised through a combination of debt and equity. Some of our customers are also willing to fund the project and this will help us procure equipment,” he said.

Estimates suggest that ATMP market worldwide is about $40 billion and it is expected to grow by 8% next year. “We cater to only less than 1% of this growing market. With countries like Taiwan and South Korea saddled with problems of wage inflation, China unable to provide IP protection, India could become the hub of ATMP work,” he pointed out.

The company is also looking at increasing its clientele. It has about 30 active clients and it provides turnkey solutions to them including sorting of wafers, testing, assembling and packaging. SPEL’s end customers include Sony, Samsung, Nokia and Motorola.

“After the capacity increase, existing clientele will be able to provide us with 50% of the work and we expect the rest to come from new customers,” said Varghese.

Last year, the company clocked revenues of $12.8 million and this fiscal it expects to cross $20.5 million. “The proposed capacity expansion will help us touch revenues of $100 million in four years,” he said.




 
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