March 26, 2001 in Social Responsibility News

SEM Expands Production Base in China

Samsung Electro-Mechanics (SEM) has established a third production base in China. The new Tianjin-based plant, Samsung High-Tech Electro-Mechanics (Tianjin) Co., Ltd. joins the company's first plant in Tianjin and its Dongguan plant. SEM has a 95% stake in the new company while its Chinese partner, Tianjin Electronics and Instruments Industrial General Company owns the remaining 5% in the US$12 million investment.

The new plant will begin production in May of this year, turning out deflection yokes and flyback transformers for TVs and monitors as well as chip components like condensers, chip resistors and Tantal condensers for information-communications products. The plant's sales target this year is US$100 million.

In 2002, the new plant will expand production to include SAW filters, VCO and TCXO.

With the opening of its third plant, SEM has solidified its position as the largest communications parts producing company in China, a rapidly growing information technology market.

Over the next five years, SEM plans to invest a total of US$200 million in the plant to achieve an annual turnover of more than US$600 million from a production base that is specialized in core mobile telecommunications parts and digital video device parts.

Last year, SEM was able to achieve a turnover of US$1.2 billion from its digital video and information-communications parts production in China. With the addition of the new plant this year, the company projects the combined sales volume will reach US$1.5 billion.

Samsung has established a solid base in China in preparation for the emergence of the Northeast Asia economy as a major global player in the new millennium. The SEM move also is in response to the Chinese government's desire to localize parts production to satisfy more than 50% of its parts demand from domestic sources.

In line with its global management strategy, SEM will convert its Suwon plant in Korea to a high-tech pilot plant and move traditional production facilities overseas in order to better utilize its manpower resources and reduce production costs.


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