Sumitomo Bakelite Co., Ltd.
TOPICS

July 19, 2001
SUMITOMO BAKELITE CO., LTD.

Development of Flexible PCB Business by Shifting Manufacture to Offshore Bases

SUMITOMO BAKELITE CO., LTD. (Headquarters: in Tokyo; Tsuneo Moriya, President) has been studying the feasibilities of offshore manufacturing sites targeting expansion of flexible PCB business and came to a decision of establishing a new, wholly owned subsidiary in the Socialist Republic of Vietnam: an integrated manufacturing plant of flexible circuits to be built for the first time in that country.

The domestic flexible circuit market has been keeping a constant growth higher than 10% annually due to the rapid development of the IT industry supported by vigorous demand and needs to pursue compact, light weight, multi-functional devices and apparatus including cell-phones, notebook PCs., PC peripherals, LCDs., digital home appliances.
In this line of business SUMITOMO BAKELITE is providing quality services well- reputed among clients /manufacturers of cell-phones and LCDs. including high-speed signal designs and structural configurations to ensure high flexural strength.
Accordingly SUMITOMO BAKELITE has been enlarging the production capacity of plants by yearly step-up at AKITA SUMITOMO BAKELITE CO., LTD., a wholly owned subsidiary, and SB FLEX Philippines Inc. (abbreviated as SFP), a finishing stage assembly base of flexible circuits.
The future flexible circuit market is expected to increase higher-density wiring substrates (e.g. so-called COFs., etc.) in compliance with the enhanced functionalization of prevailing and emerging devices.
Nevertheless, the supply and allocation positions from those 2 plants are getting tighter and not enough to answer the ever expanding growth of the industry and the demand. In addition apparently the production of mobile communication apparatus above all will be concentrated in Asian countries along with the development of EMS (Entrusted Manufacturing Subsidiary).
In view of all these surroundings and situations we determined to realign our manufacturing formation comprising the renewal of the Akita plant into a technical development and refined manufacturing center, establishment of a new plant in Vietnam in addition to the existing SFP.
This time in Vietnam an integrated manufacturing line including circuit making and assembly is supposed to be installed and we are prepared to make further investment based on our study on the future market trend.

As for the convenience of the location, attractive tax incentives, low cost & high quality labor, reliable & stable services of infrastructures are the vital factors which led us to make the choice among others.
Outline of the flexible PCB manufacturing plant in Vietnam

1. Plant location: at Tan Lon Industrial Park, near Hanoi
2. Capital: 3.2 billion yenapprox
3. Corporate ownership: 100% invested and owned by SUMITOMO BAKELITE
4. Factory site land area: 40,000 m2 approx.
5. Plant building area: 18,000 m2 approx. (1st stage)
6. Employees: 600 approx. (1st stage)
7. Production capacity: 400 million yen per month (1st stage)
8. Sales target: 3.0 billion yen approx. in the first year
9. Estimated time of completion : End of December 2002

Thank you.