SPEL plans $250M expansion

By agencies   |   Wednesday, 15 March 2006, 08:00 Hrs
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CHENNAI: Encouraged by on-target financial performance and booming market for chips, Chennai-based SPEL Semiconductor Ltd, has chalked a $250-million expansion spread over the next five years. That includes increasing the capacity of its chip assembly and testing facilities, a foray into IC design and a possible entry into newer products such as crystal oscilloscope.

However, the immediate plan of the company is to raise $30 million from overseas markets to fund the next phase of expansion, the company's Vice-Chairman, Ar. Rm. Arun, said. The funds would be raised through a combination of equity and convertible and non-convertible debt, he added.

This $30-million capital expansion would then come close on the heels of another $5-million expansion project that has just begun. This will take the company's capacity from 15 million a month to 18.5 million. Commercial production from this project is likely to commence by January 2007.

The company reported sales of $7.69 million for the first nine months of the current financial year, against $5.90 million in the same period last year. Arun said he was confident that the company would meet its turnover target of $11.36 million for the current year.

The company expected to wipe off the accumulated losses not later than the second quarter of next year. With part of the expanded capacity, turnover next year would be around $14.77 million, Arun said.

On the company's plans for getting into IC designing, he said that SPEL would like to enter designing "pre-made modules", which the IC manufacturer could buy and develop further.

SPEL would like to "create a library" that a customer could use in order to shorten his design cycle time. But the design foray is at least two-and-a-half years away.

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