Wolfson signs first partnership deal in China

Published on Sunday 6 June 2004 02:45

WOLFSON Microelectronics, the audio and video microchip developer, has signed up its first major manufacturing partner in China to help cope with growing demand in the Far East.

CSMC Technologies will make Wolfson’s chips - which are used in devices such as loudspeakers - at its foundry in Wuxi.

China is emerging as the world’s top producer of electronic goods, and the deal means Wolfson will be able to serve local manufacturers more effectively.

The company already has manufacturing partners in Taiwan and Singapore.

John Urwin, Wolfson’s operations director, said: "China is a significant growth market for our products, and our partnership with CSMC underlines our commitment to this market."

Wolfson develops media microchips at its base in Edinburgh and contracts out the manufacturing to foundries in the Far East.

CSMC was identified as a possible manufacturing partner at Wolfson’s annual general meeting in April. Urwin said samples from CSMC had exceeded Wolfson’s performance and quality standards.

The deal will allow Wolfson to ramp up production to cope with growing demand for media devices. Analysts expect the company to make a 13m profit on sales of 73m this year, up from 7m on 40m in 2003. Such bullish expectations would have been difficult to meet without extra manufacturing capacity in China.

Elvis Deng, CSMC’s vice president of marketing and sales, said: "We are proud to partner with a very successful semiconductor company like Wolfson Microelectronics."

Wolfson was valued at 250m when it floated on the London Stock Exchange last year. Lucrative deals with Microsoft for the Xbox games console and Apple for the iPod music player have made it the star of Scotland’s electronics sector.