ASMPT Limited questions SMT future
ASMPT, formally known as ASM Pacific Technology, Announced on Wednesday that it would be considering a number of options to 'maximise shareholder value' which could include selling off its SMT solutions business which includes Germany's SIPLACE and Britain's DeK Printing Machines which were acquired in 2011 and 2014.
While the announcement describes a Cloud MES, it does not clearly state if Portugal's Critical Manufacturing it acquired in 2018 would be part of a deal. One would expect it to be, considering Critical's strong links to SMT however a number of MES vendors have diversified to other manufacturing industries over the decade and holding onto a software business wouldn't be a big financial burden for ASMPT.
There has been a lot of consolidation within the industry over the last decade. This can be an indication of a plan to make the resulting entity larger than the sum of the parts, though those parts could be shrinking at the point of purchase. Within SMT there has been a drive to create Line Solutions; that is to buy the complete production line formed of many types of machines from one supplier.
From a technical point of view I have always seen this as a positive one. For the first time the difference machine builders could talk to each other and create aligned solutions.
That said, it has been noted by many industry commentators that the equipment has become a commodity and there isn't much difference from one supplier to another.
Line solutions are aimed at Tier 1 customers who are management heavy and want to buy a solution without the integration hassle. They are customers that want enterprise support that want to focus on their output and not the administration, though that can harm innovation.
However, most of the SMTA industry is made of what the Americans would call mom-and-pop contract manufacturers wanting to pick and choose suppliers based on their current relationships with existing suppliers and local support.
Then there is the experience of the staff working within a consolidated company. It may be disheartening working on a product that isn't in the headlights of the business or working in a region that isn't the most revenue generating. Also your relationship with the parent company may prevent you from working with customers who are working with other suppliers.
This debate is nothing new and ASMPT would have known of the pitfalls when they consolidated the businesses back in the 2010s triggered by the sale of SIPLACE by Siemens. The main reason for consolidation is access to cash which is the lifeblood of any business so any buyer would have to have the banking facilities to match any former parent.
What we do know is the finances of the SMT business are relatively stable though the rest of ASMPT has become a little choppy with a facility in China being shut down last year. Stable is different from growing so it seems this is a strategic move to cut costs and generate some quick cash it can invest in the remaining semiconductor solutions business (SEMI) which may have the potential of growth.
Those who have the spare cash should contact Morgan Stanley Asia Limited.
About 4IR.UK British Systems
We are a Smart Factory solutions provider for the SMT Electronics Assembly manufacturing industry. We were founded in 2016 after the support of a seed funded Business Accelerator. We create hardware Adaptors that operate in more than 20 countries that extend the life of SMEMA based manufacturing equipment by providing solutions for production monitoring and supporting data connections to the Hermes Standard and the Connected Factory Exchange CFX. We also develop Software Extensions for the Low-Code No-Code MultiPlug Edge Computing Platform. The flexibility of off-the-shelf software combined with inside industrial experience means that 4IR.UK is ideally placed to anticipate and respond to a factory's changing needs.
