The primary product from Cirtek, semiconductors, also known as chips, are found in a multitude of devices including electric vehicles, data centres, computing devices, smartphones, aerospace applications, and various industrial devices. With technology becoming ever more entrenched in humanity’s evolution, the role that semiconductors play in our everyday lives will only develop further.
Established in 1984 by Taiwanese businessman and entrepreneur Jerry Liu, Cirtek has undergone a major expansion over the last few decades, having evolved into a dynamic company that has both intellectual design capability and an internal manufacturing backbone. In the early 2020s, the founder’s son Brian assumed the role of Managing Director and CEO of the semiconductor arm, facing the task of leading the company through the pandemic, moving onwards to catalyse growth via exploring new frontiers and harnessing new technologies.
When we spoke to him last year, he explained that one of Cirtek’s competitive advantages was its strategic vertical integration, allowing the group to maintain a highly diversified technology and product portfolio, thereby also enabling the business to maintain key exposure in various semiconductor growth segments: these include RF & communications, system in package, chiplets, industrial devices, power management, and various sensing devices.
“One of Cirtek’s key strengths is in custom-made and application-specific devices or ASICs, which give the company a competitive advantage, and significantly contribute to its resilience against individual segment fluctuations. The bespoke nature of Cirtek’s chipsets is also one of the factors that makes the company well-suited to meet the demand from new growing sectors such as AI.”
While Cirtek engages in its design activities in the United States, the assembly and testing of all their semiconductor devices is done at its manufacturing complex located in a 22,296 square-metre facility within the Philippine Economic Zone Authority (PEZA) export industrial park inside Laguna Technopark, one of the most progressive and developed industrial parks in the country.
The shift to high-growth sectors
Brian Liu reflects that in order to maintain a competitive edge in the ever-evolving landscape of the technology industry, companies must be agile and forward-thinking. To this end, the company took a bold step to pivot away from its acquired business of antenna and radio production towards higher growth sectors. This strategic shift aimed at positioning the company for long-term stability and profitability, navigating away from maturing business segments and towards emerging opportunities in advanced semiconductor technologies.
“Since we last spoke, we have completed the necessary activities, the necessary upgrades, and established a new client base to materialize that goal,” says Liu. “With increasing demand for AI-driven innovations and advanced chip designs, we have recognized the immense potential of semiconductors, particularly in three-dimensional integrated circuits (3D ICs), system-on-chip (SoC) devices, and system-in-packages (SiPs), and identified these as the growth product groups that will carry the company forward.”
To facilitate the business transformation, Cirtek has established a new arm dedicated to these high-tech semiconductor categories. “This was a significant milestone, as it involved the acquisition of new equipment, the introduction of new product families, and engagement with a specialised clientele, basically reinventing of the company’s core business.”
“Naturally, the transition was not all plain sailing,” he admits. “Despite the clear advantages of this strategic pivot, internally, there was significant resistance to change. Many employees and stakeholders were accustomed to the company’s traditional business model and were hesitant to shift towards a new, unfamiliar direction. Convincing the team to embrace the change required strong leadership, clear communication, and perseverance.”
This is something that Brian Liu has demonstrated. By continuously explaining the long-term benefits of the pivot, Cirtek’s management was able to garner support from key individuals within the organisation. “Changing a long-standing corporate culture is never easy. However, with a committed and forward-thinking team, we have successfully navigated these internal hurdles and set the company on a path towards a more secure and prosperous future.”
Benefiting from market developments
He points out that another milestone that Cirtek has experienced in the past few years has been the favourable tailwinds from the ongoing trade barriers that continue to influence the semiconductor industry.
“These trade barriers and tensions between major economies have prompted a shift in supply chains towards politically neutral countries such as the Philippines. As a result, Cirtek has witnessed a surge in demand from its US client base and technology partners, who are increasingly seeking stable and reliable manufacturing partners outside of traditional semiconductor hubs.”
“The US tariffs on semiconductor products from Greater Asia have had a ripple effect on the industry. While these trade barriers initially caused some market disruption, various think tanks predict that they will ultimately lead to the premiumization of semiconductor prices. This means that as older devices phase out, the demand for high-value semiconductor components—such as 3D ICs and SiPs—will rise, benefiting companies like Cirtek that have strategically positioned themselves in these sectors.”
“We believe that this pivotal polarization in trade brought about by tariffs may initially shake the market a bit. But long term, once it stabilizes, we envision a renaissance in the semiconductor industry. Our industry continues to receive more inquiries on new product builds, new engineering designs, and new engineering activities; this development is also expected to provide further stable and sustainable growth for the company moving forward.”
Enhanced capability
Understanding that technological advancement is crucial for maintaining a competitive edge, Cirtek has committed to substantial investments in new semiconductor manufacturing technologies. The company is planning to upgrade its production capabilities with advanced flip-chip and ball grid array (BGA) technologies, essential for producing next-generation semiconductor devices. “We will eventually venture into these complex types of devices that will deliver more attractive margins for our company moving forward,” says Liu.
To sustain its operations and facilitate growth, Cirtek strives to maintain strong relationships with its suppliers. The company recognizes that a harmonious supply chain is essential for smooth manufacturing processes. To this end, Cirtek’s leadership team schedules trips to key trade partners to build and promote strong partnerships and also to explore advancements in material science, ensuring access to the best materials for next-generation semiconductor products. “Our company’s supply chain has remained stable, and efforts are in place to keep it that way in the long term.”
He further affirms that while investing in new technologies, Cirtek has also been mindful of controlling expenditures. “There are currently no plans to expand production facilities but we have decided to optimise Cirtek’s existing infrastructure by repurposing available space. The recent closure of the antenna production site has freed up valuable space within the company’s compound to serve as the expansion area for our semiconductor activity,” he says.
Promising tailwinds
Financial prudence will remain a key aspect of Cirtek’s strategy. The company aims to maintain healthy profit margins by focusing on high-value semiconductor devices. By engaging in more complex product manufacturing, Cirtek can command better prices and margins, reinforcing its financial stability and enabling future expansions into additional technologies as needed.
As Cirtek continues its transition, the company remains optimistic about its prospects in the semiconductor industry. Industry analysts widely agree that the technology and semiconductor sectors will play a pivotal role in global economic growth. With increasing reliance on AI, automation, and advanced computing, the demand for cutting-edge semiconductor products is expected to rise significantly.
“We expect this to be a transitional year. Navigating our ship into safer waters was a journey that met a lot of resistance internally but a supportive team, and key individuals within that team who are like-minded and can see the long-term perspective and the long-term benefit of this pivot, have allowed me to steer the company in the right direction.”
“I can understand that stepping out of one’s comfort zone is never easy, but it is sometimes necessary for survival and growth. The company’s journey has been one of adaptation and resilience, from its early days as a private enterprise to its expansion into a publicly traded entity. While the path has not always been linear, Cirtek has demonstrated the ability to navigate challenges and capitalize on emerging opportunities.”
In our interview last year, Liu noted that the semiconductor industry is one of the best performing industries in the world, mainly because of the role that semiconductors play in our everyday lives. That certainly remains true. “I think that we have the prospect of good tailwinds that will last for some time.”
The past few years have shown that by recognizing industry trends and aligning its business with future demand, Cirtek has positioned itself as a formidable player in the semiconductor space. Now the company awaits another successful year, further reinforcing its position. “On a macro perspective, the technology industry in general is being embraced. Analysts believe that this will be a sector that will contribute to humanity’s growth moving forward. And Cirtek will be part of that journey.”
