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“The merger will further boost our aim to be No. 1 SMT equipment supplier in Europe and Asia

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EB: It’s 11 months since the merger of ASMPT with SIPLACE took place. What strategic changes have you realised till now?

L-R: WK Lee, CEO, ASMPT and Gunter Lauber, CEO, SIPLACE

Lee: Well, I would say that we started enjoying the benefits right from the beginning. With this merger, we have achieved a size that we should be looking at. We have had our eye on the SMT market for quite some time, and the opportunity to acquire SIPLACE was something we could not let pass.

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The overall revenue of the company has increased by around 48.8 per cent in the first six months in 2011 because of our SMT business. The most important thing is that we see a lot of synergy and potential in this merged group. For example, we can take advantage of synergies in research, material procurement and marketing. What we have achieved in the past months after the merger is a very small portion of the overall potential.

In terms of technology, too, we complement each other, and together we will probably be able to address a larger market and offer more solutions to our customers. Also, we can learn from each other about the best practices that the German and Asian teams follow.

Lauber: SIPLACE is already well known in the market, but together with ASMPT, we are now a much bigger player in the electronics market, and obviously this would help us in going forward to become the No 1 company in this domain. ASMPT has been innovation driven for decades, with a focus on quality and a solid sales network in Asia. That’s why both companies complement each other so well. While ASMPT has a solid footing in Asian markets, ASM Assembly Systems is a leading supplier in Europe and among global multinationals. The combination strengthens our global market access considerably. Europe accounts for 17 per cent of our total business and America accounts for 5-6 per cent of our business for the first half of 2011. Now we are in a position to increase our product portfolio, and develop more competitive products for the European as well as the Asian markets.

EB: How important is the Asian SMT market for you?

Lauber: SIPLACE is already No. 1 in the European market, but we are not yet No. 1 in the Asian market. Now, being a part of ASM, we have better access to the Asian market, and so we can try to be No. 1 in Asia as well, by improving our product portfolio in the low end area, and this is our medium term goal. It is not only a name change and a change in corporate identity, it is the trust of the Asian customers that we have to win, who will see a much better SIPLACE now, since it is a part of ASM.

Lee: The important thing is to prove to the Asian market that we value the customers most and that together, as a bigger company, we can share all the added advantages with the customers.

Lauber: Like I said before, we already have a good market position in Europe, so now our focus is on Asia. I believe a lot of our customers in Asia would love to have German technology. I think we really have to sharpen ourselves to make these German technologies affordable in the Asian market, improve our value proposition and our way of doing business with the Asian customers. I think once we manage to do this, we will be able to tap a larger market share in Asia.

Lee: We are definitely interested in growing into new markets in Asia. China is already an established market for SMT equipment, where we have to grow. We also have to focus on India, which is a big market.

EB: What differences do you see in the European and Asian SMT markets?

Lauber: The SMT market is a global market because you have a lot of big customers like Samsung and Nokia, which are global players who produce all over the world. Then there are regional markets like Asia. While the European customers are more technology driven, the Asian customers are more cost driven. However, both the markets have big and small manufacturers, and both have immense potential. It is no secret that Europe is declining as far as manufacturing is concerned. Large volume customers and major potential for SIPLACE machines can only be found in Asia. Nevertheless, the European market is important for us. Europe continues to play a key role in the electronics market. Much of the R&D activities still take place here. When we become better known in Europe, our influence will increase in Asian production plants as well. The more known and established the ASM name becomes worldwide, the more opportunities we will have.

EB: What potential does the Indian SMT market hold?

Lee: I definitely see potential in the Indian market. It may take a little bit longer before it picks up, but there is definitely a demand for SMT machines. India is a huge country with a lot of people now using iPhones and tablets, so the demand is going to be there for sure.

The LED market is very promising in India, particularly in general lighting applications. This is where I foresee huge opportunities for both organisations with regard to packaging and LED placement. I am confident that this is an area in which we can open some important doors for SIPLACE.

Lauber: Application wise, we are targeting the telecommunications, IT, automotive, medical and infrastructure sectors, which are growing not only in India but throughout the world. In India, we are also interested in the local market. We recognise the differences in each country and are trying to adapt ourselves to the local requirements.

Lee: In order to increase our presence in India, we need to offer solutions that are suitable for the customers of India. Besides, we need to understand the customers’ needs. We have to provide the right solutions for them, keeping in mind the price sensitivity factor. So we have a two line product strategy—the top line and cost sensitive line.

EB: What gives ASMPT an edge over its competitors?

Lauber: I think we are the biggest supplier in the electronics industry; we have a true global set up and this is what we don’t see with our competitors, and this gives us an edge over them. We also have the power in terms of R&D. Being part of ASMPT now, we can spend up to 10 per cent on R&D and this is a lot of money to make sure that, in terms of innovation and technology, we have an edge.

EB: Do you see the SMT market growing globally?

Lee: The market is definitely going to grow globally in the coming years. If you look only at the mobile phone market, it has been growing exponentially with the percentage of smartphones becoming bigger. Also, the amount of electronics in cars will also continue to grow over the next few years. So the electronics market has strong growth prospects in the coming years, and this means growth for the SMT market as well.

EB: What are the goals for ASM Assembly Systems this year and over the medium term?

Lauber: Our goal is to become the worldwide No. 1 in electronics production over the medium term, together with ASMPT. Customised services are also becoming increasingly important. This is an area where our new service concept is setting a new industry wide benchmark, and we will roll out this concept worldwide in the coming months.

We are especially well known for our high end and mid-range machines. We definitely want to keep delivering the necessary technical innovations that allow us to maintain this position. At the same time, we would like to offer appropriately adapted machines to smaller manufacturing operations in the Asian regions. It is our declared goal to expand our product spectrum in this direction. This is an area in which I hope that our cooperation with ASMPT and their experience in Asia will result in further optimised machine specifications and new platforms.

EB: Mr Lee, how do you assess the future of the electronics industry in general?

Lee: I am very optimistic. Consumer electronics, in particular, will be a strong driver in the manufacturing field.

Consumer behaviour is changing, thanks to devices like tablet PCs, and we will deal with a totally new group of users who will generate more and more demand. These kinds of consumers will want to be online anywhere and at any time. This means that there will be a lot of activity in the back end and infrastructure fields. The next few years could well be the golden era for the electronics industry!

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