Phoenix Semiconductor Philippines Corp., a Korean-controlled company, said it will defer the construction of an P8-billion expansion project in Clark Freeport, amid slow global demand for semiconductors.
“The temporary deferral is in line with the slowdown in the demand of semiconductors as a result of the downturn in the economy of China, a major global consumer market and downstream manufacturer of electronics products,” Phoenix Semiconductor said in a disclosure to the stock exchange.
The company, which sells most of its products to Samsung, said negotiations with potential customers were currently ongoing which reflected the current wait-and-see outlook of the semiconductor industry.
The P8-billion project was supposed to expand the manufacturing capacity of its plant within a 15-hectare property at Clark Freeport Zone in Pampanga.
The project involves expanding the production capacity of its memory modules and chips that will cater to new customers.
The semiconductor firm said it completed the engineering plans and awarding of the project to general and specialty contractors.
Phoenix Semiconductor, which raised P1 billion from an initial public offering in 2014, said it would allocate P423.54 million for the expansion plan.
The amount would cover the construction of a new manufacturing building and structure costing P134.25 million and the acquisition and installation of production equipment and machinery costing P289.28 million.
“The company will disclose the necessary updates on the project as soon as firm developments take place. In meantime, the IPO funds remain to be placed in short-term cash facility until such appropriate time of its utilization,” Phoenix Semiconductor said.
The company is primarily engaged in the construction, ownership and operation of a plant for the manufacture, assembly, testing and warehousing of semiconductor and memory devices and applications and related products.
Its products go into various applications such as memory chips and devices for computers, laptops and servers, as well as micro SD cards for mobile phones.
Share price of Phoenix Semiconductor on Tuesday closed at P1.61.