Flextech invests in test card business
SINGAPORE, Dec 16 (Reuters) - Singapore electronics firm Flextech Holdings has invested US$3.5 million in a joint venture company with U.S.-based LTX Corp (Nasdaq:LTXX - news) to repair test cards for semiconductor machines.
The agreement allows Flextech unit Spire Technologies to expand into the test card services business, which has a large base and is a proven revenue model, P.S. Tang, chairman of Spire Technologies, told a news conference.
''Spire will have the opportunity to become a substantial player in the regional semiconductor test industry,'' he said.
LTX had a facility in Singapore handling some 8,000 cards now and could ramp up capacity by a few thousand cards, he said.
Spire Technologies would take over 65 percent of LTX's total market share of the test industry, including 100 percent of its Asian operations, when it begins operations in January.
''We're supposed to get 65 percent of total market share by the first year...65 percent could potentially be much more, depending on demand,'' executive director Marcus Kok told reporters.
Kok said Spire was looking to test 12,000 to 15,000 cards a year.
''The estimated cost per card is $400, so $4 to $5 million kind of range in revenue,'' he said, adding the company hoped in the best case scenario to break even on its investment in two years.
LTX Corp is a semiconductor test equipment company which offers a one test platform solution for testing system-on-a-chip mixed signal, digital and analog integrated circuits.
Greg Perkins, vice president of LTX, said it was the company's strategy to be more variable by sub-contracting, enabling it to respond more quickly to changing market conditions.
LTX Corp announced in August it would restructure operations because of the downturn in the worldwide semiconductor market.
''We're very excited about our fiscal year 1999,'' he said.
Asked if the company would return to profitability, Perkins said it was ''highly likely, but of course, we're very dependent on the market.''
The company reported a net loss of $6.9 million compared with $1.1 million for its first quarter ended October 31, 1998.
--Jacqueline Wong (65) 870-3080; Fax: (65) 776-8112
--Email: singapore.newsroom@reuters.com
------------------------------------------------------------------------
More Quotes and News:LTX Corp (Nasdaq:LTXX - news)Related News Categories: US Market News
biz.yahoo.com
David
WallStreet Links: 100+ Investment Links
freeyellow.com |
