Site:

NatSteel Electronics - Singapore
138 Joo Seng Rd. #07-00, Singapore 368361

Participants:

Chester C. Lin, NatSteel Chief Executive Officer
C. Y. Shaw, NatSteel Chief Operating Officer
Ng Hock Ching, Marketing Director
Tio Wee Seeng, NatSteel Senior Marketing Executive
Andy Yeo, Engineering Manager

Mission and Strategy

• Established in 1963, NatSteel, Ltd., includes the NatSteel Technologies group with NatSteel Electronics; Broadway Industrial for plastic injection molding and metal stamping in China; B.J. Industries for precision machine parts in Singapore and Batam; Engineering Computer Services for software and system integration in Singapore; and Multiwave Innovation, a multimedia company in Singapore.
• NatSteel Electronics was started in 1981. Its revenue grew from $80 million in 1992 to $500 million in 1995, with $600 million projected in 1996.
• NatSteel's customer base for computer and peripheral cards includes BMI, Chicony, Compaq, Diamond Multimedia, Hewlett-Packard, IBM, JTS, Multiwave, Video Logic, and Western Digital. Its customer base for telecommunications include Nortel, Hewlett-Packard, Supra, and Yupiteru. It is providing consumer electronics for Delta, Giken, Hipro, Hewlett-Packard, Litton, Sumitomo, and TEAC. It also manufactures RF electronics for General Instrument and Wireless Access. Complete products that it currently manufactures include 2-way pagers, set-top products, and calculators.
• NatSteel representatives stated that contract manufacturers make their money by effective utilization of capital. They operate their Singapore facility 3 shifts per day, 5 days per week, at 85% utilization.
• NatSteel is a contract manufacturer for both low-volume/high-mix and high-volume/low -mix products.

Key Elements of Presentation

NatSteel Electronics has several facilities:

   Location Sq. Ft.         Employees   SMT     Auto        ISO 
                            Lines   Insertion       9002 
Singapore    80,000    750       12         1993 
Penang      160,000    800       18     7           1995 
Bantam       70,000    750        7             1996 
Shenzhen     75,000    100        2     2           1996 
Bangkok  15,000    200        0     8           Open

• Each facility is operated as a profit center with its own manpower and scheduling.
• The Singapore facility has separate floors for the different volumes of businesses.
• Low-volume lines use a screener, MV2C chip placer, MPA3 module placer, IR, inspection, HP3070 ICT, and function test. A complete line changeover of products can be achieved in 2 hours, with another 2 hours to run sample parts before beginning volume production. Each operation uses statistical process control.
• High-volume lines are set up for double reflow products and have a screener, manual connector insertion, MV2C chip placement, MPA module placement, IR oven, screener, manual place PTH in paste, MV2C chip placement, MPA module placement, IR oven, cleaner, ICT, burn-in, functional test, visual inspection, then ship. NatSteel achieves 96% yield at ICT, 98% at functional. It has a 3-day average cycle time using batch build.
• The company is considering an acquisition to enter North America or Mexico.

Key Elements of Tour

• NatSteel Electronics provides infrastructure support from Singapore to all its facilities for process technology, materials, and finance. NatSteel has agreements with both Panasert and Hewlett-Packard to obtain additional equipment in a two-week timeframe.
• All component pricing is negotiated by the Singapore facility.
• Its MRP system is run once a week. Each facility approves the MRP volume input, takes responsibility for inventory, and either places outside purchase orders or buys from Singapore. They stock all components under customer part numbers and can run a partial MRP by customer at any time.
• It achieves 11-12 inventory turns. Its materials stockroom has limited access; expensive parts are locked inside an inner stockroom within the stockroom. The stockroom is run like a "supermarket." Material handlers get a shopping list from the batch floor release and collect parts from the shopping list. When they leave the stockroom the parts are charged out to each line. Any overages (full reels, etc.) must be accounted for within 48 hours after removal from the stockroom.
• The process engineering department works with GINTIC for joint development of technology processes. NatSteel also works heavily with Panasert in Japan.

Key Results

• NastSteel is qualifying TCP attachment using a Panasert OLB machine and has qualified flip-chip-on-glass using stud-bumping-bonding (SBB) and anisotropic conductive film (ACF). It has qualified and is building volume products using organic coating, 15 mil QFP, and TAB.
• Its officials are watching the evolution of packaging technology and work with Panasert for placement equipment and GINTIC for process development. The next focus is test development by working with HP, Teradyne, and GENRAD.

Conclusions

NatSteel Electronics has a strategy to fill its factories and to win business by providing higher value-added services including system build and ODM products. It had just won a major product build contract for a major manufacturer at the time of the WTEC team's visit.