Kulicke and Soffa

Industries Inc
Presented by Group 3:
Saif
Kushagra
Uphar
Shubham
Sudipa
 Industry Background
 K&S Inc is founded by Fred Kulicke and Al Soffa in Washington,
Pennsylvania in the year 1951
 K&S Inc is Supplier of Semiconductor equipment’s
 Global Expansion of business to Switzerland in 1972
 Semiconductor Industry saw a boom with sales increasing from $7.5
billion in 1992 to $47.7 billion in 2000
 New Plants were being built in Singapore, Taiwan, the Philippines and
South Korea
 Israeli site itself hold 50% global market share in semiconductor wire
segment
 Presently headquartered in Singapore
Global Sales

Country Percent of Sales

US 9
Taiwan 31
Malaysia 9
The Philippines 11
Singapore 10
Korea, China and other Asia Pacific 22
Other International 8
Customers

 Primary Markets for K&S products and services included Asia,

the United States and Europe
 Customers outside the United States contributed up to 91% of
sales in 2000,83% in 1999. and 80% in 1998
 Asia has the dominant sales out of all other continents, market
share of around 83%
 Captive and merchant manufacturers
Competitors

 Several factors influenced the nature of competition like

performance, quality, customer support, price and delivery
 Some of the major competitors of K&S are as follows:
1. ASM Pacific Technology and Shinkawa-Bonders
2. Disco Corporation-Blades
3. PECO
4. Small Precision Tools Inc-Capillaries
5. CoorsTek
 Factors behind change in Supply chain Network

• As Customer Base was moving to Asia so that’s why they are focusing on other
locations like China, Jordan and Singapore

• They are shifting close to the customer base which is majorly Asia

• It will help in tackling competition by providing quality and high performance

• It will lead to cost reduction as there is change in technology, material and

inventory management
Factors to be considered while redesigning

 Availability of labor and average hourly wages

 Infrastructure
 Exchange Rates
 Investment Cost
 Customer Satisfaction
 Procurement of raw materials
 Over stocking of inventory
Benefits of Israel Expansion

 K&S Inc had presence in Israel for over 30 years

 They constitute around 50% of the market share
 Solid Infrastructure in Israel
 They are into Research and Development in Israel
 Reduction in Operating cost
 Production will be near R & D
 Flexibility will be there
 In-time production commitments
Project Data Comparison

Country Investment Efficiency Capacity Shipping Shipping Average

Cost (Units/worker (In millions cost Cost Wage Rate/
/hour) of units) (To Asia) (To US) hour

Israel 2 10 2.5 1 0.75 10.78

Jordan 4.5 8 3.5 1 0.75 1.05

Singapore 6 8 3 0.50 1.50 9.19

China 6.5 7 4 0.50 1.50 0.5

 Recommendation

 Suzhou, China is a better option

 Very low wage rate, 0.50
 83% of sales in Asia so it will be close to customer base
 Well established infrastructure and proximity to Shanghai
 Foreign investors are offered tax incentives
Thank You