If Integrated Microelectronics Inc. (IMI) Group is to land more clients, it must sell North American OEMs on the idea of doing business in the Philippines, where the EMS provider is based.
Many North American manufacturers view the Philippines as rife with political turmoil. But others, including a number of Japanese OEMs, view the islands as an attractive low-cost manufacturing area, according to Arthur Tan, president of IMI Group, which is located in Binan, Laguna. The company, an electronics contractor for eight years, started out as a semiconductor packager 21 years ago.
"Doing business with us is not hard," Tan said. "We try to convince [potential customers] that the Philippines is stable."
The Philippines, which contributed only 2% to last year's total global EMS revenue of $103 billion, is ripe for more outsourcing, according to Randall Sherman, an analyst at New Venture Research Corp. in Nevada City, Calif. Most North American OEMs and EMS companies, however, are unaware of the country's assets, including an English-speaking and well-educated workforce, Sherman said.
"It's not a place most EMS companies normally go to greenfield," choosing instead to set up in China, and few multinational OEMs are headquartered there, he said.
Tan is counting on IMI Group's ties with major OEMs like Alcatel, Hitachi, Sanyo, and Toshiba to raise its profile. The company is also partnering with Isis Surface Mounting, a San Jose contractor, to help North American OEMs with low-cost manufacturing services.
Last year, IMI Group's sales totaled $75 million, most of it generated from the manufacture of optical and high-density disk drives. The company has 7,000 employees working in three plants.
"We're trying to diversify by going into automotive, wireless communication, and medical products," Tan said.
For the medical market, IMI Group plans to make blood glucose monitoring devices and thermometers. For automotive, the company is interested in navigation devices along with its current production of rear-safety sensors.
As for communications, "the [current] downturn in this sector is a blessing," Tan said. "We can use the slowdown to get our people up to speed on wireless as well as optical technologies."
New Venture's Sherman believes IMI Group can accomplish most of its goals. "They'll probably do well getting overflow business from OEMs," he said.