Ionics EMS Bags $1-B Philips Contract

Article excerpt

Ionics EMS, the electronic contract manufacturers of technology company Ionics, Inc., announced yesterday it has been awarded a US$1 billion contract by Royal Philips Electronics N.V. of the Netherlands to make 10 million CD rewritable drives annually.

The company will invest US$50 million to build and equip a new plant in Laguna for the Philips contract, Ionics said in a statement. It is currently building an intelligent, fully-automated production facility of 2 hectares in Laguna to house dedicated manufacturing lines for the assembly of printed circuit board assemblies (PCBA) and the complete CD-RW drive.

Some 50 Ionics engineers and staff are to be sent for training in Philips' CD-RW facilities in Belgium Hungary.

In Amsterdam, Philips Components, a unit of Philips Electronics NV, said it planned to double its production capacity of CD-Rewritable drives to 20 million units a year by the end of 2001 and the Ionics contract will take care of half of this expansion.

Ionics said the Philips contract would have minimal impact on its earnings this year, but full impact would be reflected by 2002.

This latest supply chain partnership between Philips and Ionics will make the Philippines the first integrated CD-RW manufacturing site for Philips in Asia. The project is a full turnkey contract involving the total boxbuilt assembly of CD-RW drives for rewritable CDs, the preferred storage media for PCs around the world, with production set to commence in August.

Experts predict that worldwide shipments of CD-RW drives will exceed 35 million units this year, with continuous growth the years after.

Ionics corporate affairs vice president Judy Qua disclosed that the formal turn-key partnership contract between Ionics EMS and Royal Philips Electronics was signed yesterday by the chief executives of both companies. …