United Test and Assembly Centre (UTAC), a major independent global provider of semiconductor assembly and test services, is adding a third plant as part of its plan to invest US$100 million (Bt3.5 billion) over three years in Thailand.

Singapore-based UTAC now operates two plants in Bang Na and Wellgrow, just outside Bangkok, with a total of 60,000 square metres of production space hosting 598 wire-bonders and 340 testers.

The new 29,100-square-metre facility is located just a short distance away from the existing plant in the Wellgrow Industrial Park of Chachoengsao province and will boast 10,000 square metres of 10K clean-room space. It will house the test operations and distribution centre of UTAC Thai (UTL).

The plant is expected to employ more than 1,000 staff when it opens in the second half of next year.

The expansion of the Thailand operations follows UTAC's acquisition of NS Electronics Bangkok (1993) - since renamed UTAC Thai - in June for up to $175 million.

UTL is a recognised global leader in QFN semiconductor assembly services, with a daily output of more than 5 million units.

As part of the group's plan to reap synergies between UTL and UTAC Singapore and optimise group resources, lead-frame-based packaging activities will be consolidated in Thailand over the next few years. This will enable UTAC Singapore to focus its resources on substrate-based packaging.

"Our Thailand operations are growing very strongly and have become a significant contributor to the group's growth over the past two quarters," Lee Joon Chung, group president and CEO of UTAC, said this week.

"Moving forward, the group's strategy will be to consolidate lead-frame-based assembly in Thailand with Singapore concentrating on substrate-based packaging activities. The strategy to focus on the respective strengths and capabilities of our Singapore and Thailand operations reinforces the synergies between both sites," he said.

Leasing an existing building for the new plant helps the company to immediately meet growing demand. The company originally intended to build from scratch, but the needs of its customers prompted to seek a faster solution to boost the scope and scale of its operations to accommodate its business growth, said Udom Udompanyavit, president of Thailand operations.

"We believe that with the new plant, we will be able to strengthen our technical capability and offer more compelling and complete test and assembly solutions to the group's customers," Udom said.

The group believes that taking into account UTL's expected contribution and new deals, revenue this year will rise about 70 per cent.