The news of Siemens selling off its SIPLACE placement equipment business to ASM Pacific Technologies (ASMPT) has created a buzz in the market. Both the companies have signed an agreement which will be effective from early 2011.
By Richa Chakravarty
Saturday, September 18, 2010: Commenting on the reasons that led to this development, Jack Chua, CEO, Siemens Electronics Assembly Systems Pte Ltd (SEAS), Singapore, explains “SIPLACE business nature is unlike other Siemens business units, thus, resulting in only a limited number of shared technological and marketing benefits. With the minimal appreciable synergies with other businesses of Siemens’ industry sector, selling of SIPLACE business not only streamlines our business focus but also allows SIPLACE to intensify its aggressive approach in the market.”
However, the industry shares a different view. “Siemens with its division SIPLACE has been in India for almost 10 years, yet it could not make a profitable market share here. Siemens is a multi-billion company with a repute, and SIPLACE has not been able to deliver those business commitments to Siemens,’’ explains Vipin Chauhan, assitant manager, sales and marketing, Nmtronics India Pvt Ltd.
In India, SEAS is not very active—it occupies just 2-3 per cent of the market as the company failed to adopt strategies that go well with the Indian customer. Out of the total machines used by Indian manufacturers, just 20 per cent are from Siemens, while Fuji occupies 80 per cent of the share.
Reasons for choosing ASMPT
ASMPT is a Hong Kong based 425 million euros company. Through its subsidiaries, the company is engaged in design, manufacture and marketing of machines, tools and materials used in the semiconductor industry. The company was a strategic choice for Siemens due to its product portfolio.
“Like Siemens, ASMPT focuses on technological innovations and high quality solutions. The company already invests 10 per cent of its revenues in R&D, which fits in well with our global technological leadership position,’’ adds Chua.
However, ASMPT will continue with the same brand name—SIPLACE, as it is highly recognised in the industry. W K Lee, CEO, ASMPT adds, “We strongly believe that the acquisition will represent an excellent combination of advanced technologies with vast experience in cost efficient manufacturing and excellent partner networks. The synergistic effects of combining the strengths of the two organisations will serve to push SIPLACE’s business, and the whole ASM Group to new heights.”
Impact on Indian market
India will continue to be an important market for SIPLACE, claims Chua. “Leveraging on ASMPT’s experience, our production will benefit from new supply and material sourcing opportunities. This, in turn, will put us in a better position in India, where price performance is a key consideration for most customers,” explains Chua.
However, some feel that ASMPT will have to strategise new plans for the Indian market. “SMT machines are source of generating revenue and profitability with economical cost of production for the customers, so one has to be efficient in delivering products and customer service. As it is, the uncertainity for future of SIPLACE division, coming days will be terrible for the customers. With the transfer of ownership, ASMPT have to adopt new strategies in order to make a mark in Indian industry,” adds Chauhan.
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