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August 1, 2014

IMI on the Front Lines of a Manufacturing Revival

IMI celebrates 34 years in business this August, developing new business models as well as high value-add services that fit the dynamic markets it serves

August 1, 2014, Laguna, Philippines — Integrated Micro-Electronics Inc. (IMI), the Ayala-led electronics manufacturing services (EMS) company with global operations, is ready and able to leverage manufacturing technologies for greater competitive advantage given the company’s access to easily deployable talent and skill.

Arthur Tan, IMI president and chief executive officer, said that despite the challenging economic environment IMI has continued to grow by taking full advantage of its “global footprint, extensive technical capabilities, and sharp focus on high-growth products.”

IMI currently ranks 21st on the latest list of top 50 EMS providers  in the world of Manufacturing Market Insider, a US-based EMS trade publication. The list is based on 2013 EMS-related revenues of companies engaged in EMS operations.

IMI has also reported that it posted US$431 million in consolidated revenues for the first two consecutive quarters ending June 30, 2014—a 23 percent increase from US$350.5 million for the same period in 2013. The corresponding first-half net income of US$11.3 million is more than five times the first-half 2013’s profit of US$2.1 million.

Tan said, “We maintain our profitable growth trajectory, driven by increased demand from customers in the telecommunications infrastructure, automotive electronics, and storage device markets.  More important, we have a healthy sales pipeline, especially for the automotive segment.”

He also said that recoveries in the global markets and the electronics industry “have bolstered our optimism for the rest of 2014.” 

Experts have noted that on the way to creating more factories of the future, this year will set the stage for a new manufacturing renaissance. With the manufacturing industry having an established track record of continuously improving productivity, an “intelligent economy” driven by more informed consumers and one in which talent is at a premium, will dramatically restructure value chains to be closer to demand regardless of direct labor costs.

Tan said he believes that IMI is in fact moving away from “making only what it’s good at” toward “leveraging our experience and expertise to venture into new growth areas.” Parsing “EMS,” he added that the company is shifting from the “E” (electronics) toward the “S” (services); and where “M” (manufacturing) had until recently been all about low costs, its future may be less contingent on labor arbitrage than on convenience.

He said, “IMI’s strategic focus over the last decade has begun to bear fruit, as we continue to develop new business models as well as high value-add services that fit the dynamic markets we serve today.”

Manufacturing movements have circled back from offshoring (or outsourcing) in the 1990s to the last decade’s reshoring, in which multinationals retrieved some of their production intended for the American market. The emergent trend is next-shoring, whose two defining priorities are proximity to demand and proximity to innovation, particularly an innovative base of suppliers, according to the McKinsey Quarterly. In both developed and emerging markets, demand and innovation will be critical because next-shoring is less about moving manufacturing from one place to another, than about adapting to, and preparing for, the changing nature of manufacturing everywhere.

“The capacity to rein in manufacturing technologies toward competitive advantage depends on talent,” Tan said. “To do this it is crucial to have people who understand your industry, your business, your specific environment, the technologies themselves and how to maximize these. All this requires sophisticated knowledge not easily available anywhere. Next-shoring takes manufacturing operations to where that talent can be found. I am confident that the presence of IMI’s talent pool in critical locations across the world precisely addresses this critical point.”

IMI also ranks 8th on the list of the top 10 EMS players in the automotive market based on 2013 EMS revenues derived from the automotive segment. This list is based on the report “The Worldwide Electronics Manufacturing Services Market, 2014 edition” of New Venture Research Corp.

Philippe Marquet, IMI Design & Development (IMI D&D) head, said in a recent interview that concepts such as connected and autonomous vehicles are reinforcing the automotive industry’s status as a key market for electronic components, established earlier with the rise of infotainment. This represents manifold opportunities for IMI as a specialist in providing module design and test services and an expert in vehicle electronics. 

Three trends dominate automotive electronics. First, vehicle data can be collected and used to create new services and strategies to avoid accidents and traffic jams. Second, connectivity with current and future smart devices is the rule. Third, developments in speech recognition, gesture control, touch pads, and feedback mechanisms will shape the future of smart cars.

IMI D&D is focusing its efforts on several platforms such as camera and motor drive, which are linked to emerging businesses, including camera electronics, and demonstrate to key customers the company’s innovative design capability.

The group also continues to maintain its core expertise initiated years ago, which covers lighting, power modules, human-machine interface, and short-range wireless and sensing technologies. The last includes positioning, temperature, pressure, and photo and video.

Tan said, “As the electronic content of cars increases, we capture more opportunities with original automotive electronics manufacturers, applying our wide-ranging expertise from design and product development to test development to manufacturing derived from years of experience in the automotive market.”

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IMI will always be relevant, if not on the leading edge of the next big thing."

Arthur R. Tan, Vice Chairman and CEO

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Integrated Micro-Electronics, Inc., also known as IMI, is one of the leading global providers of electronics manufacturing services (EMS) and power semiconductor assembly and test services (SATS) in the world.