PHOENIX SEMICONDUCTOR Philippines Corp. (PSPC) has awarded contracts worth $22.28 million for the second phase of its expansion in Pampanga.

In a regulatory filing, the listed company said its President Byeongchun Lee signed separate contracts with Welcron Hantec Co. Ltd. of South Korea and its local subsidiary Welcron Hantec Philippines Corp. on Tuesday. 

PSPC tapped Welcron Hantec Phils. to undertake the structure and electro-mechanical construction works for the main process building, power utility building and the overbridge structure comprising the initial stage of the expansion.

Welcron Hantec Phils. will also provide engineering and labor manpower in accordance with the construction implementation plan as well as administrative, management and related services for oversight and implementation of activities and responsibilities of contractors engaged for the project.

PSPC will pay Welcron Hantec Phils. a contract fee amounting to 1.9 billion South Korean won (about $1.67 million) in lump sum.

Welcron Hantec, meanwhile, will supply the construction equipment and materials for the expansion project for 19.93 billion South Korean won ($17.6 million). It will ship the materials from South Korea or other countries on a free-on-board arrangement.

PSPC also signed a purchase agreement with Welcron Hantec for the supply of the water demineralization and waste water treatment systems for the Phase 2 production facility. The South Korean firm will purchase the equipment from Mirae Eng Co. Ltd. for $3.05 million. 

“Semiconductor production facilities require deionized, high-purity water free from minerals and ionic contaminants. The wastewater treatment facility, on the other hand, is in strict compliance with environmental regulations,” PSPC noted.

In January, the company announced it will start implementing the Phase 2 Expansion Project within the year in anticipation of more clients other than South Korea’s Samsung Electronics Co., Ltd.

The expansion will progress in two stages. PSPC will first construct a manufacturing building with an initial production footprint of 18,000 square meters (sq.m.), a warehouse spanning 1,000 sq.m. and a power utility building.

The company expects to complete the first stage of the expansion by end-August. It will then start bringing in more production equipment, ancillary utilities and support facilities in anticipation of incoming production orders.

New customers are expected to absorb the additional production capacity from the initial stage of the expansion. The facility will also accommodate the semiconductor assembly and packaging contracts of PSPC major shareholder SFA Semicon Co., Ltd.

In the first nine months of 2016, PSPC booked a 50% year-on-year decrease in net income to $6.02 million from $12.08 million. The decline largely reflects the 31% plunge in revenues because of weaker demand. Last Feb. 21, the company said its board of directors resolved to change its name to SFA Semicon Philippines Corp. to reflect the corporate identity of its South Korea-based parent SFA Semicon. Shares in PSPC closed six centavos or 3.21% higher at P1.93 apiece on the Philippine Stock Exchange on Tuesday.