AT&S to Build New Production Site for IC Substrates in Southeast Asia
June 1, 2021 | AT&SEstimated reading time: 2 minutes
AT&S AG, one of the leading manufacturers of high-end printed circuit boards and IC substrates, plans to build a new production site for IC substrates in Southeast Asia, subject to the approval of the Supervisory Board.
The planned investment will total up to € 1.7 billion for the construction of a new production complex for high-end substrates between 2021 and 2026. This would be the largest investment to date in the history of AT&S.
The project is based on, and subject to, a planned collaboration with two leading manufacturers of high-performance-computing semiconductors, with whom long-term contracts are to be concluded. These contracts are expected to be signed shortly.
About half of the investment volume is to be provided by the customers’ contributions to financing. The balance sheet presentation of these contributions is yet to be clarified. In any case, a capital increase by issuing new shares will not be required to finance the project.
The plan is to produce ABF substrates for high-performance processors at the location in Southeast Asia. These processors are applied in areas such as high-performance computers, data centres, gaming, 5G, automotive and AI. The planned production site will total approximately 200,000 m² in size. Construction is scheduled to start in the second half of 2021, and high volume production at the end of 2024. The currently planned capacity can generate additional revenue potential of up to € 1 billion p.a. when fully utilised. The Management Board emphasises the importance of this project. It contributes significantly to the future diversification of the customer portfolio, broadening the regional footprint and the company’s positioning in the rapidly growing market for ABF substrates.
In case of this investment and given the development in the other business segments as part of the “More than AT&S” strategy, the Management Board expects a business development with revenue of approximately € 3 billion in the financial year 2025/26 (2023/24: more than € 2 billion). This would correspond to a compound annual growth rate (CAGR) of approximately 20% through to 2025/26. Due to the increased focus on high-end applications in all business segments, an EBITDA margin in the range of 27 to 32% can be achieved (2023/24: 25 to 30%). Depending on the balance sheet presentation, the net debt-to-EBITDA ratio could temporarily exceed the medium-term target of <3 and the equity ratio could fall short of the internal target of >30% during the project phase until the capacities are utilised. The Group’s medium-term ROCE target would continue to be >12%; this target should be achieved with the ramp-up of production.
Suggested Items
The Pulse: Drilling Down on Documentation
04/18/2024 | Martyn Gaudion -- Column: The PulseHow did a product aimed at signal integrity end up being more about documentation? For a little backstory, the Polar team has an unspoken “no business speak” rule at certain times. So, why is this column titled “Drilling Down?” I find it fascinating when a company sets off in one direction, but customers steer it in another. That’s what has happened here as customers took a product down a fork in the road we couldn’t predict. Your destination isn’t always where you initially set off to go, and that’s how we got to our subject of drills and drill documentation.
Real Time with... IPC APEX EXPO 2024: IPC Government Relations Holds Lawmakers Accountable
04/16/2024 | Real Time with...IPC APEX EXPOThe IPC Government Relations team is constantly educating Congress and the executive branch about the importance of a robust domestic electronics manufacturing industry. As Richard Cappetto explains, the GR team is focused on proactive strategies, workforce policies, and sustainability, as well as the significance of apprenticeship programs, President Biden's executive order, and employer incentives. Also discussed is the PCB Act, its investment program, tax incentive, and DoD's understanding of supply chain risk.
Catching Up With Chasom Electronics
04/16/2024 | Dan Beaulieu, D.B. Management GroupI recently met with Chasom Electronics’ founding director Anil Kumar. Chasom offers a unique menu of services for companies looking to extend their technology capabilities on a short- or long-term basis. Read on to learn about this very unique service company.
Marcy's Musings: The Growing Industry
04/16/2024 | Marcy LaRont -- Column: Marcy's MusingsAfter decades of steady decline in the U.S. and Europe, the PCB industry is finally growing, especially in China Plus One countries. The U.S. for example, which seemed to have abdicated its title as the world leader in innovating high-technology cutting-edge manufacturing processes, is now in a race to regain what it lost and then some. The PCB fabrication industry is growing in the West, thanks to DoD funding, the CHIPS and Science Act, and hopefully, the passing of HR 3249, the Printed Circuit Board and Substrates Act.
PCB007 Magazine April 2024 — The Growing Industry Issue
04/15/2024 | I-Connect007 Editorial TeamAfter more than two decades of steady decline in the U.S., the PCB industry is finally growing in the West thanks to the CHIPS and Science Act, DoD funding, and hopefully, the passing of HR 3249, the Printed Circuit Board and Substrates Act. The U.S. is now in a race to regain what was lost and then some. But what does “growing” look like for the organizations that have received DoD funding, and for the rest of us? How can we sustain this growth?