Dutch chip maker shifts
plant to Thailand
Green shoots,
recovery
beginning?
By Jon Fernquest 
When
companies sense that
the business
cycle is
near the end of a downward trend and about to start moving upwards
again, what do they do? They start investing in new plants and production capacity.
So new investment can be a promising sign of recovery, a harbinger of things to come.
Or the investment might be premature. The global recession may turn out to be more than a mild v-shaped recession.
Instead the economy may dip down again for a longer w-shaped or "double-dip" recession.
Or as Nobel-laureate economist Paul Krugman has repeatedly warned, the much dreaded Japanese "lost-decade" L-shaped recession may be in the cards. Hopefully not.
Today's article follows the vocabulary:
recovery - when the
economy starts to get better after an economic downturn or recession
green shoots - signs of economic recovery (See Wikipedia)
sense that - have a feeling that, not always supported by evidence, become aware of something not yet obvious
business cycle - the usual up and down pattern in an economy of growing business (growth) and contracting business (recession, depression) (See Wikipedia)
plants - factories
production capacity - the greatest amount of goods that a factory can produce
promising - likely to be good or successful
a sign of Y - something that shows that Y is happening or exists
a promising sign - something shows likely success
harbinger - a sign that something is going to happen in the future
things to come - events in the future
premature - happened too early, should have happened later
recession - a period of reduced economic activity and growth, starts with at least two quarters of negative GDP growth (See Wikipedia and list of recessions in US)
v-shaped recession - a short and shallow recession, only a slight dip in economic activity (See Nouriel Roubini for an explanation of these different shaped recession also this summary)
u-shaped recession - a severe and protracted recession
w-shaped recession, double dip recession - a short recession followed by a short period of growth and then a recession again, the early 1980s is an example
dreaded - feared and hated
L-shaped recession - a long-term stagnation of the economy, like Japan in the 1990s
in the cards - in the future (in the Tarot cards of a fortune teller)
Tarot cards - using a set of cards with pictures on them to predict a person's future life (See Wikipedia)
fortune teller - the practice of predicting a person's future through mystical or supernatural means, usually for commercial gain (See Wikipedia)
green shoots - signs of economic recovery (See Wikipedia)
sense that - have a feeling that, not always supported by evidence, become aware of something not yet obvious
business cycle - the usual up and down pattern in an economy of growing business (growth) and contracting business (recession, depression) (See Wikipedia)
plants - factories
production capacity - the greatest amount of goods that a factory can produce
promising - likely to be good or successful
a sign of Y - something that shows that Y is happening or exists
a promising sign - something shows likely success
harbinger - a sign that something is going to happen in the future
things to come - events in the future
premature - happened too early, should have happened later
recession - a period of reduced economic activity and growth, starts with at least two quarters of negative GDP growth (See Wikipedia and list of recessions in US)
v-shaped recession - a short and shallow recession, only a slight dip in economic activity (See Nouriel Roubini for an explanation of these different shaped recession also this summary)
u-shaped recession - a severe and protracted recession
w-shaped recession, double dip recession - a short recession followed by a short period of growth and then a recession again, the early 1980s is an example
dreaded - feared and hated
L-shaped recession - a long-term stagnation of the economy, like Japan in the 1990s
in the cards - in the future (in the Tarot cards of a fortune teller)
Tarot cards - using a set of cards with pictures on them to predict a person's future life (See Wikipedia)
fortune teller - the practice of predicting a person's future through mystical or supernatural means, usually for commercial gain (See Wikipedia)
(In photo on right a technician performs a check at a Silicon wafer plant)
NXP invests in Thailand
Largest integrated circuit base for PhilipsBy NAREERAT WIRIYAPONG
15/07/2009
Netherlands-based NXP, the leading semiconductor maker founded by Philips, has poured about US$300 million into Thailand to establish its largest production base for integrated circuit (IC) packaging.
The company generally invests from $5 million to $30 million in Thailand every year, depending on the business cycle, said Theo Halders, vice-president and general manager of NXP Semiconductors and managing director of its Thai unit.
After cutting spending in the past six months after the automotive sector's sudden drop in demand, NXP Manufacturing (Thailand) has started to invest again and to recruit staff as orders have picked up since the second quarter, he said.
"We have seen a strong recovery in business in the previous quarter and the orders for the third quarter are quite good," said Mr Halders.
NXP's plant in Bangkok's Lak Si district is now running close to its maximum capacity, producing 10-15 million chips for export to Europe, the US and Asian markets including Japan and China, he said.
Globally, NXP operates six semiconductor testing and assembly plants in Europe, the Philippines, Hong Kong, China and Bangkok, which is the largest facility, said Mr Halders.
"We are investing in Thailand for two things, the first is production expansion by adding new equipment. At the same time, NXP is relocating high-tech activities from Europe and some products from the Philippines to Thailand," he said.
In 2008, NXP announced a major production restructuring, partly through closing some European plants. This policy has been stepped up this year. A US wafer plant has already been shut down and another one in Europe is to close.
To transfer production from Europe, NXP's Thai unit has strengthened its technical capabilities by hiring more engineers. The company currently employs 350 engineers.
NXP is the largest Dutch employer in Thailand with a workforce of about 3,200, of whom 200 were recruited last month, said Mr Halders. The company, which has been in Thailand for 35 years, aims to hire another 100 staff this year.
Economic outlook for chip industry
But the outlook for the IC industry remains uncertain, largely depending on the global economy, said Mr Halders."We still don't know how the economy and the industry will look the rest of the year. If the fourth quarter is reasonably good, we will have roughly the same level as last year," he said.
With net sales of $5.4 billion last year, NXP has a strong position in chips for the home entertainment, automotive and identification markets. Its major customers include Nokia, Philips, Sony and Panasonic.
In Thailand, NXP was recently awarded for the second time the government contract for chips for identification cards. Globally, the company provides 80% of chips for e-passport programmes.
NXP was spun off from Philips in 2006 and the Dutch consumer electronics giant still holds about 20% of the company.
(Source: Bangkok Post, business, NXP invests in Thailand: Largest integrated circuit base for Philips, NAREERAT WIRIYAPONG, 15/07/2009, link)
semiconductor - a special
chemical and substance used to make electronic devices and chips (See Wikipedia)
a chip, a silicon chip, microchip, Integrated Circuit (IC) - a small piece of silicon with microscopic circuits on it, used in computers (See Wikipedia)
integrated circuit (IC) packaging - the small container around the chip, connects chip to device
a silicon wafer - the thin piece of silicon that a silicon chip is made on
a wafer plant, a Silicon wafer plant - a special very clean factory that manufactures silicon chips
Philips - a Dutch electronics company, one of the largest electronics companies in the world (See Wikipedia)
production base - the main place where manufacturing is done, where the most important factory is
business cycle - the usual up and down pattern in an economy of growing business (growth) and contracting business (recession, depression)
managing director (MD) - a person who runs a company and is also a member of the board of directors (like a CEO)
recruit staff - find new people to join a company and become employees
orders have picked up - orders have increased
maximum capacity, capacity - the maximum amount of work that a system can handle
running close to its maximum capacity - almost too much work to handle
production expansion - increasing the amount of goods produced by the factory
relocating - moving from one location to another location
stepped up - increased activity
transfer - move from one place to another place
technical capabilities - being able to do technical work
workforce - the workers, employees of a company
the outlook - what is likely to happen in the future
identification cards - a card that people carry with them so they can officially prove their identity, for example national id card or passport (See Wikipedia)
identification markets -
e-passport, biometric passport - a passport with a chip with information that can be used to identify the passport holder, for example their fingerprint (See Wikipedia)
spun off - formed a new company from part of an existing company
consumer electronics - small electronic goods like CD players, MP3 players, and mobile phones that families buy for home use
a chip, a silicon chip, microchip, Integrated Circuit (IC) - a small piece of silicon with microscopic circuits on it, used in computers (See Wikipedia)
integrated circuit (IC) packaging - the small container around the chip, connects chip to device
a silicon wafer - the thin piece of silicon that a silicon chip is made on
a wafer plant, a Silicon wafer plant - a special very clean factory that manufactures silicon chips
Philips - a Dutch electronics company, one of the largest electronics companies in the world (See Wikipedia)
production base - the main place where manufacturing is done, where the most important factory is
business cycle - the usual up and down pattern in an economy of growing business (growth) and contracting business (recession, depression)
managing director (MD) - a person who runs a company and is also a member of the board of directors (like a CEO)
recruit staff - find new people to join a company and become employees
orders have picked up - orders have increased
maximum capacity, capacity - the maximum amount of work that a system can handle
running close to its maximum capacity - almost too much work to handle
production expansion - increasing the amount of goods produced by the factory
relocating - moving from one location to another location
stepped up - increased activity
transfer - move from one place to another place
technical capabilities - being able to do technical work
workforce - the workers, employees of a company
the outlook - what is likely to happen in the future
identification cards - a card that people carry with them so they can officially prove their identity, for example national id card or passport (See Wikipedia)
identification markets -
e-passport, biometric passport - a passport with a chip with information that can be used to identify the passport holder, for example their fingerprint (See Wikipedia)
spun off - formed a new company from part of an existing company
consumer electronics - small electronic goods like CD players, MP3 players, and mobile phones that families buy for home use
