Comment: SMT Plc

I had the pleasure of meeting Stars Microelectronics in 2009 when the company was making its margins building screen after screen for RIM (blackberry) and its revenues manufacturing hard drives for Western Digital. The owner had a very good story regarding how the company came to be and within the past year has been unfortunately hurt badly by 1. Blackberry’s decline in popularity globally and 2. The Thai floods as their factories are in Ayudhya. There are a couple of points I found interesting in the article, 1. A lot of Thai companies are investing in technology to minimise their reliability on manual labour and 2. As a pure turnaround play several manufacturers are hoping to book their insurance claims in 3Q12. I’m not too sure on the company’s overall recovery story but having learnt about how the company came to be, how it managed the airport shut down I would advise that you all follow closely this company’s development. When I’m back in Thailand I’ll definitely try to do a company visit.

 SMT has 1,350 workers, down from 2,500 because it imported new machines to replace those damaged by the flood, which cut the manual workload by as much as 50%.

SMT also shifted its core production from microelectronics module assembly (MMA) of 120 million pieces per year to the higher-margin integrated circuits (IC) at 1.5 billion pieces per year.

MMA used to make up 60% of its production, with IC at 40%. But it will flip that ratio, raising IC capacity to 2.5 billion pieces per year this year.

He hopes to receive around 2 billion in insurance claims by the third quarter this year, which will be realised as profit.

Source: Bangkok Post

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What happened this past week

Its been a relatively quiet week, other than local domestic issues not regarding to the stock market to whine about I haven’t seen much else news to comment on.


  • US existing home sales in Aug totals 4.82mm annualized, well above est of 4.56mm and the most since Nov ’09 with months supply falling to 6.1 from 6.4.
  • Thai banks continue to grow in August
  • Spain sells 4.8b euros of 3′s and 10′s, above 4.5b euro target with 82% being cheaper 3′s.
  • BOJ prints money!


  • US initial Jobless Claims total 382k, 7k more than expected and 4 week avg at most since late June.
  • Euro zone mfr’g and services index falls to lowest since June ’09.
  • German ZEW current conditions drops to weakest since June ’10.
  • HSBC China mfr’g PMI remains below 50 for 11th straight month at 47.8 vs 47.6 in Aug, Shanghai index at lowest since Mar ’09.
  • China FDI falls for 9th month in past 10, although not as much as expected in Aug.
  • BOJ prints money!