|For semiconductor industry veteran Christopher Borch, “People Make Everything Happen” has been a key guiding principle through business and life.
This was one indelible lesson that Los Angeles, California-born Borch learned over the past four decades, after arriving in Singapore in 1981 for work.
“The American company that sent me here was a fledgling maker of automated equipment for the assembly of semiconductors. As I travelled from factory to factory to install and service our machines, I fell in love with the people and culture of the region,” he recalled.
When a customer in Malaysia came to him with a suggestion for improving the miniature tools needed for one of the critical chip-assembly processes, Borch decided to strike out on his own.
“We began operations in the back of a friend’s hat-sewing factory with just S$1,200 and a 30-year-old lathe machine - that’s how Micro-Mechanics was born,” said its Founder and Chief Executive Officer, who has nearly 40 years of engineering, manufacturing and management experience in the chip industry.
“And perhaps because the company started so modestly, we’ve seen first-hand that the basis for sustainable growth is not a building, a fancy machine or a big bank account, but rather people - their skills, diligence and hard work,” added Borch, who earned his undergraduate degree from Furman University, and a MBA from The Wharton School at the University of Pennsylvania.
“It’s really a privilege to have so many incredible people working at Micro-Mechanics today, including a large number who have given us nearly their entire careers.”
Established in 1983, Micro-Mechanics (Holdings) Ltd designs, manufactures and markets high-precision parts and tools used in process-critical applications for the wafer fabrication and assembly processes of the semiconductor industry.
The Group serves a global base of customers from production plants located in Singapore, Malaysia, China, the Philippines and the US, with a direct sales presence in Europe.
Borch credits the company’s success today to the decision early on to decentralise its manufacturing operations, so as to better support its customers.
About five years after starting up in Singapore, Micro-Mechanics opened its second plant in Penang. It now has a total of five manufacturing facilities globally.
“This proved to be the right strategy. Not only has being decentralised helped us serve a growing customer base with fast and cost-effective support, running multiple locations also forced us to strengthen processes, structures and policies, which resulted in greater organisational maturity,” he said.
“I’m probably most proud to say that each of our plants is managed by a team that is made up of 100% local staff. When COVID-19 interrupted travel, our approach to building strong and independent teams really paid off, as our plants continued to operate without major hiccups.”
Enhancing Stakeholder Value
Another feather in the Group’s cap is its focus on Environmental, Social, and Governance (ESG) issues - in particular, building a robust corporate governance culture in the organisation.
“Although it is usually associated with tedious compliance and voluminous reporting, governance is really a simple methodology for aligning the way people at all levels of the organisation - from the board room to the shop floor - make decisions and take actions,” Borch pointed out.
“It’s about putting aside personal interests and working to enhance and protect stakeholder value. As a public company, good governance also means respecting the way investors make decisions. This means being transparent and providing accurate, complete and timely information.”
To this end, it was easy for Micro-Mechanics’ Board to agree unanimously about a year ago to continue with its quarterly financial reporting after SGX allowed companies to shift to half-yearly reporting.
“Given the fast-moving events during the last year with COVID-19, not to mention rapidly changing markets, unpredictable advances in technology and uncertain geopolitics, I think we’ve taken the right reporting approach, even though it requires more work,” he added.
Since its SGX listing in 2003, Micro-Mechanics has won over 30 awards in recognition of its high standards of corporate governance, quality of disclosure, transparency and investor relations.
In the latest Singapore Governance and Transparency Index published in August 2021, Micro-Mechanics was ranked 15th out of 519 companies for its practice of good governance. Last year, the Group bagged the Most Profitable Company 2020 award by The Edge Singapore Centurion Club.
Meanwhile, prospects for the chip industry remain bright.
“The pandemic has accelerated remote work, video conferencing, cloud-based computing and a host of other applications, which have greatly increased the demand for chips,” Borch noted.
“Over the longer term, our view of the future of the semiconductor industry remains unchanged, if not enhanced. We believe the industry is poised for a prolonged period of solid growth as chips become increasingly embedded in nearly every aspect of modern life, from today’s smartphones to tomorrow’s driverless cars,” he added.
“The key to the Group’s success lies in our continuing ability to seize long-term opportunities, and correctly identify the initiatives and investments that bring value to our customers.”
In its market forecast released on 8 June 2021, the World Semiconductor Trade Statistics (WSTS) said it now expects global semiconductor sales to expand by a stellar 19.7% this year - corresponding to a market size of US$527 billion - compared with a March 2021 projection of 10.9% growth.
For 2022, the global semiconductor market is forecast to rise a further 8.8% to US$573 billion, driven by double-digit growth of memory chips, according to WSTS data.
Ahead of the Curve
“As the industry continues to grow and develop new equipment and processes for manufacturing chips with device geometries below 10 nanometres, we think only a handful of suppliers will have the abilities to meet these increasingly stringent requirements,” Borch pointed out.
“We believe our strong customer focus, rigorous evaluation process for making investments, and the great work by our people should enable the Group to maintain its competitive edge.”
Nevertheless, the Group continues to grapple with a number of challenges, including staying ahead of the technology curve.
“As quality, cost and cycle-time pressures in the chip industry are tremendous, we need to find ways to meet these ever-increasing demands of customers,” Borch noted.
This means advancing the Group’s know-how, improving processes and building advantages that set it apart from competitors.
“A good example is the research work we’re doing at our plant in Singapore to develop proprietary elastomer materials to reduce the possibility of chip damage caused by electrostatic discharge or ionic contamination,” he added.
“In the future, we think there may only be a handful of suppliers capable of meeting the industry’s rigorous standards, and we would like to be one of those leading companies.”
Another bugbear is talent retention in the organisation. “Although our annualised employee turnover rate of less than 10% is low in comparison to what we hear other companies are experiencing, I’m always concerned about what more we can to do to attract, retain and build a great team of people. Our ability to do this will be a major factor in our long-term success,” Borch admitted.
As it gets more difficult to hire skilled talent, the Group will also need to find ways to expand without adding people. “We’re putting a lot of emphasis into streamlining labour-intensive processes and increasing the level of automation at our factories,” he added.
|Work may be all-consuming, but this 65-year-old makes it a point to take time to unwind with an early morning run, or by hanging out with his wife, four children aged 21 to 29, and two dogs.
“I think it’s important to have purpose, set some big goals, and pursue them with energy and diligence over the long term,” Borch said.
“My wife and I work hard to be relevant to our children as they grow up and have their own careers and families. As I always tell our kids: “Every day is really the same - it’s an opportunity to listen, learn and love.”
Micro-Mechanics Holdings Ltd
Micro-Mechanics designs, manufactures and markets high-precision tools and parts used in process-critical applications for the wafer-fabrication and assembly processes of the semiconductor industry. The Group serves a global base of customers from five manufacturing facilities located in Singapore, Malaysia, China, the Philippines and the US, with a direct sales presence in Taiwan and Europe. In addition to designing and manufacturing a market-leading range of consumable tools and parts used in the assembly and testing of semiconductors, the Group also engages in the contract manufacturing of precision parts and tools used in process-critical applications for the semiconductor wafer-fabrication industry.
The company website is: www.micro-mechanics.com
Click here for the company's StockFacts page.
For the full year ended 30 June 2021 financial results, click here.
About kopi-C: the Company brew
Text: Jennifer Tan-Stanisic
Photo: Company file
This article was originally published in kopi-C, a regular column on the SGX Research website that features C-level executives of leading companies listed on Singapore Exchange. These interviews are profiles of senior management aimed at helping investors better understand the individuals who run these corporations.
For previous editions of kopi-C: the Company brew, please click here.