Domestic players join the field
PHILIPPINE IT COMPANIES HAVE NOT BEEN LEFT BEHIND IN THE SOUTHEAST ASIAN HI-TECH BOOM, CHIPPING IN WITH THEIR OWN INNOVATIVE CONCEPTS AND PRODUCTS

The big names in the Philippine Information Technology sector are by no means restricted to foreign multinationals. Homegrown firms in the blossoming industry are quickly establishing themselves as competitive players seizing a hefty market share and spurring development and job creation.
The three most successful local firms in the Philippine IT sector are Integrated Microelectronics Inc. (IMI), Automated Technology (ATEC) and Pacific Microwave, which recently changed its name to REMEC Philippines.
IMI has been around since 1980 as a contract manufacturer of electronic components and sub-assemblies for companies such as Hitachi, Toshiba, Alcatel, JVC, American Power Conversion and Mitsubishi Electric just to name a few. IMI’s majority shareholder is the Philippines’ most widely diversified conglomerate, Ayala Corporation.

“Being an Ayala-backed company is one of the key things that drew me to the firm,” remarks Arthur Tan, IMI president. “It means we are financially secure.”
It also means that management at IMI follows the same successful formula as any other Ayala subsidiary. As a result, IMI was able to undergo a smooth transition from a semiconductor packaging and testing operation to a leading EMS (Electronic Manufacturing Services) company with yearly profits of some $5 million on a turnover of more than $60 million.
IMI now caters not only to the Printed Circuit Board manufacturing side, but also to finish form encapsulation and everything in it. The company even has design services that can do hardware and software development.
“To be able to make that transition and still have that growth level in the end speaks volumes for this company,” says Mr. Tan. “The main thing now is to make another level of transition, which is one of the challenges that I have to face right now.”

RENATO M. TANSECO President and CEO of ATEC

Automated Technology, or ATEC, on the other hand, has been content to stick with semiconductor assembly and testing, with special emphasis on providing its service to those companies that need non-standard processes and products. To get the job done, ATEC likes to treat its clients more like strategic partners than simply customers, working closely to develop their products and processes to exact specifications.
“These days quality is a given. Cycle time, on-time delivery, these are all givens. There’s got to be something else that you can offer your customers,” notes Renato M. Tanseco, ATEC’s chairman and CEO. And that something turned out to be an innovative concept called the captive line, meaning that ATEC dedicates a place in its factory specifically to its customer.
“We have staff that are also dedicated exclusively to the customers,” Mr. Tanseco explains. “They have an operation manager, quality manager, engineering line and maintenance. These people are all working for a small business unit of their own. The customer has control over the line and over priorities. They have flexibility. They have complete control of the process and it is their own process that is followed.”

ON TRACK Homegrown Philippine companies offer quality and on-time delivery coupled with excellent customer care.

Fresh thinking is also behind the success story of the Pacific Microwave Corporation (PMC), which was acquired this summer by the California-based REMEC group. In 1995, Filipino Domingo Bonifacio led six other Asian-American Silicon Valley entrepreneurs to his native country with about $3 million in backing to set up the nation’s first offshore plant to assemble and test fully integrated microwave products for export.
“Our backers had no experience in electronics, but they believed that the wireless industry would be the fastest growing industry in the next 15 to 20 years. They also wanted to contribute something to the country,” recalls Mr. Bonifacio.

REMEC chairman and CEO Ronald E. Ragland says Mr. Bonifacio is nothing less than a national hero. “He ventured off to the United States and had burned in him the desire to go back and create opportunity for his homeland. He spent 20 years in Silicon Valley developing a unique skill in a very unique area of technology, came home and transformed that dream into reality.”
When PMC sought financing earlier this year for a major expansion project, it received offers from at least 10 venture funds. But at the last minute they received an offer from Nasdaq-listed REMEC to acquire 100% of the firm and now expansion plans are even more ambitious.
“Our intention is to expand our team to as many as 10,000 employees over five years. Now we are currently at 600,” Mr. Ragland says.