Samsung to build microchip plant in Clark

CLARK FREEPORT -- Global giant Samsung Electronics is investing US$1 billion in a 30-hectare lot at the Clark Special Economic Zone (sub-zone) after almost a year of intense courtship by the Philippine government to locate its microchip manufacturing facility in the country.

An official of the Subic Clark Alliance Development Council (SCADC) said Samsung, the only Asian conglomerate that made it as the world's largest chipmaker business, is expected to start construction within the year.

According to a SCADC official, the Board of Investments pursued the huge investments and brought the Korean chaebol first to Subic Bay but the Freeport has a limited area for the facility. As a result, the government offered the Clark ecozone, which Samsung appreciated.

The negotiation with Samsung lasted for about a year or just shortly after the official announcement by Texas Instruments, largest chipmaker for mobile phones, of its US$1 billion investments in Clark.

But the negotiation was further delayed because of the resignation of its chairman Lee Kun-Hee on US$113 million tax evasion charges.

At present, Samsung has two operations in the country -- Samsung Electronics Philippines Manufacturing Corporation (Sephil) and Samsung Electronics Philippines Corporation (Sepco).

Sephic, which is located in Calamba Premier International Park, produces optical disc drives for its global network. Sepco, on the other hand, is Samsung's local marketing arm for its finished products.

Samsung has also manufacturing operations in each of the Asean (Association of Southeast Asian Nations) countries except Singapore, which hosts its regional headquarters.

The entry of Samsung in Clark will boost the ecozone as a hub for electronics chipmaking, the official said.

"This means the country can move upstream to design and manufacturing as opposed to the low value-added testing and packaging operations," the SCADC source said.

The presence of world's electronics giant makers in Clark also ushers in an integrated circuit manufacturing cluster in Clark.

Clark Development Corporation president Liberato Laus has already informed acting director Augusto Santos of the National Economic and Development Authority (Neda) to approve the third phase of the 230-kilovolt Concepcion-Clark Power Transmission Project to finally convince Samsung to come in.

In September last year, President Gloria Macapagal-Arroyo issued an executive order for the implementation of the power transmission project to meet higher power demand brought about by the power sensitive-operation of the US-based Texas Instruments.

The National Transmission Corporation (Transco) and CDC agreed to implement two phases (Phase 1 and 2) of the project at a cost of P3 billion to meet the tight schedule for the commercial operation of Texas Instruments by August 2008.

Phase 3, on the other hand, aims to meet the power needs of future locators and covers the construction of a third 230-KV line with corresponding 230/69-KV substation transformers, 69-KV feeders and appurtenances.

The CDC said the last phase of the project is now crucial given the expansion of existing locators and the entry of new investors.

Initial power requirement of the planned Samsung project was placed at 36 megawatts by November 2008. SUNSTAR

Samsung investigates Philippine building plots

Following on from compatriot Hanjin Heavy Industries and Construction's foray in to the country, Samsung Heavy Industries is identifying potential land in the Philippines in which to expand.

Hanjin became the first Korean shipyard to invest in a fully operational yard outside of home, while others like Daewoo Shipbuilding and Marine Engineering and Samsung have opened up massive block building sites in mainland China.

STX Shipbuilding last month announced it has received provincial approval to open both a block building site and a shipyard in Shandong province, China.

Samsung is understood to have investigated a number of sites throughout the Philippine archipelago and will make an announcement soon. Hanjin's development at Subic Bay, four hours drive north of the capital Manila, is gigantic, coming in at 500 hectares which is comparable to Samsung's facility on Koje island, Korea.

Paying just $179,000 a year for the lease and with generous tax breaks thrown in as well, Hanjin has let it be known it will be able to knock out ships starting next year 10% cheaper than at its cramped home base in Busan.

There are two other foreign firms in the shipbuilding sector in the Philippines: Japan's Tsuneishi in Cebu island, and Keppel who have operations in Batangas, Cebu and Subic, the latter of which was eyed by Daewoo at the end of last year.

“Subic is bound to become one of the four largest shipbuilding facilities in the world,” Philippine president Gloria Macapagal-Arroyo noted as she toured Hanjin's facility at the end of last month. seatradeasea online