Gudeng Precision Industrial Co (家登精密), a key supplier of extreme ultraviolet (EUV) pods to Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and Intel Corp, yesterday said it has formed a joint venture with local suppliers of semiconductor equipment, key parts and materials to serve overseas customers initially in the US, following the steps of its key customer.
The alliance has been welcomed by one of their key customers as the customer seeks to source key equipment and material from suppliers with agility and flexibility for its US fabs.
Gudeng, which initiated the idea of forming an alliance at the beginning of this year, has joined forces with 7 local semiconductor companies, creating a new company TSS Holdings Ltd (德鑫半導體控股). TSS Holdings was formed in July with an initial capital of NT$160 million (US$5.02 million).
Photo: CNA
Gudeng’s US subsidiary would help distribute equipment, components and material made by TSS’s stakeholders. TSS holds a 49 percent stake in the US subsidiary of Gudeng, which has been operating for more than a decade in the US.
“TSS Holdings strive to satisfy the needs of its key US customers through providing localized one-stop services,” Gudeng chairman Bill Chiu (邱銘乾) told a media briefing. “Through this collaboration, we will be able to provide our services with optimal efficiency and capacity to our customers in the US.”
Furthermore, it would be more cost-effective by operating one company than eight, Chiu said.
The goal is to occupy a strategic position in the global semiconductor supply chain through gradually replacing some of the world’s major semiconductor suppliers with locally-made equipment, key components and materials, Chiu said. Europe and Japan would be the next destinations of TSS, he said.
At home, TSS aims to raise the usage of locally-developed semiconductor equipment, key parts or materials, from less than 5 percent, Chiu said.
Most of the alliance’s members are equipment or key material, or component suppliers to TSMC, or hold crucial importance in the global semiconductor supply chain, including automated material handling system supplier Symtek Automation Asia (迅得機械), Asia Neo Tech Industrial Co (科嶠), a cleaning machine supplier used in advanced box-like front-opening unified pods (FOUP), and key semiconductor component supplier Yeedex Electronic Corp (意德士).
The box-like FOUPs are used to ship, transport and store 12-inch wafers, which are unloaded from the FOUP within processing equipment to keep the wafers sterile. EUV pods are used to carry reticles when EUV tools are utilized to produce chips.
Talking about Gudeng’s business outlook, Chiu said “the second quarter should be the trough. A recovery should be coming from the third quarter.”
Gudeng’s revenue this year is expected to be higher than last year, aided by seasonal upticks in the second half, a new revenue source from its new aerospace business, and two newly acquired companies.
In the first seven months of the year, the company’s revenue expanded 15.69 percent year-on-year to NT$2.79 billion.
Gudeng has clinched agreements from General Electric Co, Boeing Co and Parker Hannifin Corp to supply aircraft landing gear barrels. To cope with rising demand, Gudeng plans to raise about NT$2.8 billion through issuing corporate bonds to fund the construction of a new factory in Tainan.
Chiu said that Gudeng would become a major supplier in the aerospace segment, Aerospace Industrial Development Corp (漢翔航空) and EVA Airways Corp (長榮航空).
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