AMS to reduce production capacity in Asia after losing contracts


2 min

Chipmaker AMS will seriously cut back its production capacity in Asia following the termination of contracts from its putative customer Apple and the loss of market share that is expected to follow.

Despite the loss of market share in consumer electronics, the leader has shown his optimism.

Credit: Keystone

“We will adjust the cost position in the corresponding units,” CEO Alexander Everke said in an interview on The Market on Tuesday. The workforce in production in Asia in particular will be “significantly reduced”, which should be “quickly feasible”, given the contractual flexibility in force in this region of the world.

Despite the loss of market share in consumer electronics, the leader has shown his optimism. “Thanks to the new technologies that we will put forward and thanks to the customer relationships that we now have, we will continue to grow over time in all segments”, he assured, insisting on the diversification of the portfolio.

Asked about a possible depreciation of acquisitions made in the electronics segment (Heptagon, Princeton), Mr. Everke said he saw “no reason” for a value adjustment, these operations having been very successful for the company, “which we brought very strong growth “.

Going back on his ambitious objectives – double-digit sales growth and adjusted operating margin of 20-25% – the manager described them as “realistic”. With the integration of Osram, AMS will be able to focus “on innovations and markets where we can better differentiate ourselves from the competition and thus generate attractive growth and a higher margin”.

The profitability of the Austrian group listed on the Swiss Stock Exchange should also benefit from the synergies announced for a total of nearly 240 million euros, as well as the sale of the less profitable Osram Digital unit. Mr. Everke considers himself “resolutely on track” to reduce the financial blemishes and the indebtedness of the recently acquired Munich industrialist.

Once all the divestments and the transformation of the group are completed, “which should happen next year”, according to the boss of AMS, the company can fully devote itself to the pursuit of its strategic objectives.