Penang State's investPenang has came out with facts and figures including information on employment to clear the air on what's going on with the current industrial merges and acquisitions as in press statement published in Mutiara Buletin Issue of Nov 1-15, 2015 as below:
investPenang director Datuk Lee Kah Choon
PRESS STATEMENT—CURRENT INDUSTRY M&A [investPenang]
27 Oct 2015
1. As the State's investment promotion agency, investPenang wishes to address the current spate of on-line news and speculations regarding corporate movements of a few semiconductors / E&E (Electrical and Electronic) multinationals in Penang.
2. In today's industries and business, mergers and acquisitions are commonly carried out not only to consolidate operations but also for other reasons such as increase in market share and technology synergies. This is happening globally in the semicon and E&E (Electrical and Electronics) technology companies and Penang, as an electronic hub, with its many international companies, is invariably impacted.
3. In 1H 2015 alone, globally, $72.6 billion worth of M&A (mergers and acquisitions) were announced. This was more than four times the value of M&A reported in fiscal 2014. The 3 major M&A include:
- $37 billion acquisition of Broadcom by Avago
- $16.7 billion acquisition of Altera by lntel
- $11.8 billion acquisition of NXP Semiconductor by Freescale.
4. In Penang, 5 multinationals recently announced their M&As:
[a.] AMD joint venture with Nantong Fujitsu Microelectronic Co.
85% share in AMD's manufacturing sites in Penang and Suzhou, China were sold to Nantong Fujitsu Microelectronics for $371 million cash; with AMD retaining 15% stake. The manufacturing site in Penang will remain in operation. The JV is the “latest step in AMD's strategic transformation to further sharpen focus and operations on designing high-performance products." The company announced that "there are no planned workforce reductions in Penang AMD facility”. The deal expected to be closed first half 2016, as long as regulatory and other approvals are obtained.
[b.] Sanmina Corp to take over Motorola Solutions’ manufacturing facility in Bayan Lepas.
Motorola's manufacturing in Technoplex facility will be taken over by Sanmina Corp, a leading integrated manufacturing service provider; whilst it focuses on R&D in Penang. They confirmed that the "sale does not change Motorola's commitment in Malaysia" and ”allows Motorola Solutions to deliver best in class service to its partners and customers”. They also reported in a local press on Oct 14th, 2015 that the "transfer does mean there will be a reduction in staffs". Employees will be transferred to Sanmina at no lesser terms than what they currentlv have. The transaction is expected to be finalized by early 2016.
[c.] Western Digital acquiring SanDisk
WD announced on 21 Oct 2019, its plan to acquire SanDisk for $19B cash and stock. The deal is scheduled to be closed by Q3 2016. There are currently 1042 employees in SanDisk Penang.
[d.] Amphenol to close one part of its business.
Amphenol is consolidating its mobile consumer products division in Asia Pacific, closing one of its plants in Penang. 150 employees will be affected. The Company will continue manufacturing of high speed connectors in 2 other plants in Penang, employing 800 staffs.
[e.] Dell acquired EMC at $67billion
Acquisition, announced on 12 Oct, 2015, was made to ‘evolve the company into the most relevant areas where lT is moving’.
From the above, it can be seen that only 150 jobs in Penang are affected. More job consolidation could be happening due to other M&As but there are no news of closure to date. Corporate movements will impact Penang, as host to many MNCs, and also other States in Malaysia.
5. In Penang, investments in the manufacturing sector remain robust. Recently, Jinko Solar as well as JA Solar, both multinational Chinese companies, started operations in Penang offering a total of 1,900 jobs. HP is currently constructing their factory in Batu Kawan and will employ 1,000 staff when it is in full operation. Overall, according to MIDA (Malaysian Investment Development Authority) , a total of 17,896 new jobs will be created in Penang via approved investments in 2014 and 13,199 new jobs via approved investments in 1H 2015.
6. Penang managed to attract RM48.2 billion worth of investments from 2008 to 2014, which is 93% higher than the RM24.9 billion invested on a similar 6 year period from 2001 to 2007.
7. In addition to manufacturing, the services sector, especially Global Business Services and Shared Services Outsourcing continues to offer high value job opportunities. HP recently started a finance centre at PDC Technoplex. Others include Osram‘s GBS center employing 150 staff and Jurong Engineering Design Center with 200 staff.
8. The Penang Career Assistance and Talent (CAT) Center continues to provide assistance to job seekers and employers looking for right candidates. As at 26 Oct, 2015, a total of 3,246 vacancies in Penang can be found in job portals linked to the CAT Centre.
9. The State government via investPenang is working closely with companies that have made announcements to assist and smoothen transition. However, for companies that have yet to make any official statements, due to confidentiality requirements at this stage or other reasons, whenever they can, we urge them to clarify matters to quell the spread of rumours. Further updates and clarifications will be given by investPenang when necessary.
10. As an international city where many multinationals are located, Penang will be subjected to vagaries of global business trends directly. We however remain positive in facing these challenges and steadfast in assisting all our investors and employees.
Source | Mutiara Buletin
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Cause for concern: Is Penang on the cusp of losing its position as the Silicon Valley of the East following news of relocations, mergers, retrenchment and even plant closures involving several major foreign electronic players in the state? What's your opinion? (Before you form your opinion do read through the related articles above)
Boldly go. LLAP
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