integrated manufacturing for inclusive...

1Your Innovative EMS Partner ‹ ›Strictly Confidential. All right reserved by Integrated Micro-Electronics, Inc. (IMI) – including any disposal, exploitation, reproduction, editing, distribution, as well as in the event of application for industrial property rights. Feb 2013

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Integrated Manufacturing for Inclusive Growth

Arthur TanPresident and CEO, IMI

PCIERRD Technical Forum

June 30, 2015

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A Brief Intro to IMI

3Your Innovative EMS Partner ‹ ›Strictly Confidential. All rights reserved by Integrated Micro-Electronics, Inc. (IMI) – including any disposal, exploitation, reproduction, editing, distribution, as well as in the event of application for industrial property rights. March 2015

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Founded in the Philippines in 1980

Publicly listed; majority owned by Ayala

Manufacturing space of 232,000sq.m. with 13 factory sites in 6 countries

18,700 employees worldwide

Low cost manufacturing across all major regions

18th in Top 50 EMS companies globally in 2014

8th in Top Automotive EMS companies globally in 2013

Preferred supplier of global OEMs, including Assa Abloy and Bosch

Electronics Manufacturing Services (EMS) and Power Semiconductor assembly

Integrated Micro-Electronics, Inc (IMI)


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BY CUSTOMERNATIONALITY

Diversified Growing Global Business

BY MARKET SEGMENT

0

100

200

300

400

500

600

700

800

900

200

2

200

3

200

4

200

5

200

6

200

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0

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IN MILLION USD’s

by Nationality

US$ 844M2014 REVENUE

P 37.5 B Europe50%

Americas25%

Japan8%

Rest of Asia17%

Automotive38%

Industrial12%

Communication21%

Consumer12%

Multiple Markets

11%Computing6%


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Guadalajara, Mexico

Philippines

Laguna

Cavite

USA

CaliforniaTustin

NagoyaJapan

Singapore

China

Jiaxing

Shenzhen(Liantang)

Shenzhen(Kuichong)

Chengdu

Manufacturing

Engineering

BotevgradBulgaria

TřemošnáCzech Republic

Taguig

Global Footprint

Support only

Hong Kong

FranceLyon

GermanyMunich

Michigan(Detroit)

MexicoGuadalajara

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A Peek Into Manufacturing in the Philippines


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Philippine Electronics Export

2012 2013 2014Non-Semicon 5.3 6.5 8.1

Semicon 17.5 17.4 17.8

$17.5 $17.4 $17.8

$5.3 $6.5 $8.1

Source: National Statistics Office

In Billion US$

Growth Rate % 8.1% 5.3%

Total Export 22.7 23.9 25.9

8.4%

2015Outlook

5~7 %growth

Still predominantly semiconductor assembly; electronics manufacturing (OEM or EMS) has room

for growth


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From PCB and FPCB Assembly Services to Complete Box Build

High-Volume Manufacturing

Low-Volume, High-Mix Manufacturing

Complex Equipment Manufacturing

Precision Metals/ Machining

Power Semiconductor Assembly and Test Solutions

Plastic Injection

Materials Sourcing

Logistics Solutions

Product Reliability and Failure Analysis

Calibration

Product Repair Services

OEMs:Brand Marketing

OEMs:TechnologyR&D

IMI GROUP

NPI Support andFulfillment

Manufacturing

Typical EMS Activities

Design and Development

Advanced Manufacturing Engineering

Test and System Development

Custom Automation

EMC Pre-certification Solutions

Design andEngineering

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Source: Strategic Business Economic Program of UA&P

Automotive Sales Volume

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50

100

150

200

250

2002 2003 2007 2008 2009 2010 2011

79103

61 61 64 7467

7

20

57 63 68

94 98

113

73 68 53 50

52 57

CKD CBU Informal Sector

Vo

lum

e in

‘00

0 u

nit

s

CKD (completely knocked down) - Fully disassembled item required to be assembled here

CBU (completely built-in) - Completely built out of the country

Number of vehicles

assembled in the

Philippines (CKDs) is

going down; More and

more CBUs are imported

due to low tariffs

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Opportunities in Manufacturing


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New Kinpo announced they are setting up operations in Batangas

There’s a resurgence of Japanese investments– below are examples

Manufacturing Opportunities in the Philippines

Company Details Status

Bandai Toys Done

Murata Electronic Components Done

Fujifilm Corporation Optical Lens Assembly Done

Citizen Watch 2015

Epson Printer 2015-16

Sources: Associated Press, Manila; Speech of Pres. Aquino June 3, 2015


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Car ownership in ASEAN will rise to nearly 40M by 2015 and around 55M by 2050

Car sales will have growth of over 10% in average in the coming years

There will be rise of regional vehicle manufacturing and assembly industry due to competitive labour costs (Viet Nam and the Philippines) and availability of huge number of auto components suppliers and strong engineering support, especially in Thailand and Malaysia.

ASEAN will become the 6th biggest automotive market globally by 2018

Shift of ownership from motor bikes to cars will drive the market

Automotive Market in ASEAN

Source: Deutsche Bank, Frost & Sullivan

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Strictly Confidential. All rights reserved by Integrated Micro-Electronics, Inc. (IMI) -- including any disposal, exploitation, reproduction, editing, distribution, as well as in the event of applications for industrial property rights. April 2013

Your Innovative EMS Partner ---------------------------------------------------------------------< >13

Opportunities with the ASEAN Integration

• As China shifts from being export driven to a consumption-driven oneand with wages rising, there are opportunities for ASEAN to gain manufacturing businesses

• Due the market potential, the region will attract more global manufacturers that will want to set up a regional footprint in ASEAN

Source: McKinsey, BDG Asia

Large regional consumer base: 650 million population

More complementation, less competition within ASEAN-- more trade in products within the same industries (intra-industry trade)

Opportunities for finished goods manufactured in the Philippines for ASEAN

AEC is not “coming in 2016”-- 99% of all tariff lines were already brought down to zero since 2010


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Improve infrastructure

Subsidize energy cost and lower the minimum wage for the growing manufacturing sectors

Change its mindset: Provide integrated incentives and subsidies for complementary manufacturing industries to entice more investors into these industries

What Government Can Do


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For example, the integrated industries of Electronics and Automotive (and this can be expanded to include Plastics, Metals and others)

Today’s car is a PC with 4 wheels, not a car with radio and a few other electronics-- electronic content of a car is at 40% for traditional, internal combustion engine cars and jumps as high as 75% for electric or hybrid electric vehicles; these %’s continue to increase. Leverage the strengths of the country in electronics manufacturing to boost automotive manufacturing.

There are plenty of opportunities for ADAS or Advanced Driver Assistance Systems (this segment has the highest CAGR within automotive electronics at 18%); IMI is poised to increase its local electronics manufacturing capabilities for ADAS and other car electronics.

More on Complementary Industries

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Video 1 : Mega Trends in Automotive Electronics Part 1

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Video 2 : Mega Trends in AutomotiveElectronics Part 2

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Video 3: IMI -Technology in your life through the years and the future

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Thank you

integrated manufacturing for inclusive...

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