We would like to thank everyone who helped us complete and submit our group assignment report on time. The report focuses on Industrial Relations at STMicroelectronics in Tanjung Agas, Muar, Johor. We especially want to thank Madam NorSaliza Bt Abu Bakar, our Financial International Trade lecturer, for her valuable support and guidance during this project. She has been crucial in providing suggestions for organizing the assignment and patiently answering any questions we had.
We would like to express our gratitude for the overall support provided by Mr. Shahrom Bin Tumin, the Human Resources Manager of STMicroelectronics. His role in conducting interviews, gathering and providing information, collecting data, and guiding us throughout the completion of this report assignment has been crucial. Despite their busy schedules, he has offered unique ideas to make this report assignment stand out. We are also thankful to our parents for their constant support. Thank you.
STMicroelectronics is a global independent semiconductor company with expertise in developing and delivering semiconductor solutions across various microelectronics applications. What sets STMicroelectronics apart in the industry is its unmatched combination of silicon and system expertise, manufacturing strength, Intellectual Property (IP) portfolio, and strategic partnerships. The company remains at the forefront of System-on-Chip (SoC) technology and its products play a crucial role in enabling current convergence trends.
LOCATION: Tanjung Agas, Muar, Johor.
ADDRESS: International Private Company PO Box 28, Tanjong Agas Industrial Area, 84007, Muar, Malaysia.
PHONE NO: 60 06 956-6000
FAX: 60 06 952-4401
WEBSITE: www.st.com
PRIMARY SIC: Printed Circuit Boards
Primary NAICS: Printed Circuit Board Manufacturing
No.OF WORKER:
4100 workers (700 Foreign workers and 3400 Local workers)
Description Manufacturing:
Manufacture of integrated circuits and semiconductors.
COPYRIGHT © COMPANY BACKGROUND
The company is located in Tanjung Agas, Muar, Johor. The address is International Private Company PO Box 28, Tanjong Agas Industrial Area, 84007, Muar, Malaysia. The phone number is +60 06 956-6000 and the fax number is +60
06 952-4401. The website for the company is www.st.com. The primary Standard Industrial Classification (SIC) of the company is Printed Circuit Boards and its primary North American Industry Classification System (NAICS) code is Printed Circuit Board Manufacturing.
The company has a total of about %4100 workers with a breakdown of approximately%700 foreign workers and %3400 local workers. The manufacturing process involves the production of integrated circuits and semiconductors. The copyright for this information belongs to the
company background
STMicroelectronics, previously known as SGS-THOMSON Microelectronics, was founded in June 1987 when SGS Microelectronic and Thomson Semiconductors merged. The name was changed to STMicroelectronics in May 1998. The company is headquartered in Geneva, Switzerland and has Carlo Bozotti as its current President and CEO. As of December 31, 2010, STMicroelectronics had around 53,000 employees, including those from ST-Ericsson.
STMicroelectronics has been publicly traded since 1994 and its shares are listed on the New York Stock Exchange (NYSE: STM), Euronext Paris, and Borsa Italiana. In 2010, the company reported a revenue of $10.35 billion and generated a revenue of $2.7 billion for Quarter 2 of 2011.
They have advanced research and development centers in ten countries along with fourteen main manufacturing sites. With approximately 13,000 researchers and around 20,000 patents showcasing their technological advancements, STMicroelectronics stands out as one of the world’s largest semiconductor companies with expertise spanning all areas of the electronics industry.
Their notable strengths lie in Multimedia Convergence applications, Power Applications field,and Sensors technology.
STMicroelectronics has a diverse portfolio comprising of ASICs, ASSPs, and Multi-Segment products. The company is recognized as an innovator in sustainability practices. Its mission is to serve as a profitable and dependable supplier of diverse semiconductors, providing strategic independence to global partners. This objective acknowledges the crucial role that semiconductor microelectronic circuits and components play in advancing commerce, industry, science, medicine, and entertainment presently and in the future.
COMPANY VISSION Our goal is to become the leading company in Sense & Power applications and multimedia convergence. We are dedicated to product innovation and becoming a solution provider.
COMPANY OBJECTIVES
- Growth: We aim to achieve a 5% market share, surpassing our competitors in terms of growth.
- Financial: Our objective is to generate shareholder value and achieve a return on equity that exceeds the average of the Top Ten semiconductor suppliers.
- Social: We prioritize contributing to the well-being of our employees and communities where we operate. We also emphasize environmental care and social responsibility.
STMICROELECTRONICS GROUPS OF COMPANIES
Australia – Belgium – Brazil – Canada – China – Czech Republic – Finland – France – Germany – Hong Kong – India – Israel – Italy – Japan- Malaysia – Malta- Morocco- Philippines- Singapore- Spain- Sweden- Switzerland- United Kingdom- United States of America.
Our World-Class Client Base includes market leaders across the world and in all our targeted markets. Top 10 OEM Customers (2010): Apple, Bosch, Cisco/Scientific Atlanta, Continental, Hewlett-Packard, Nokia, Research in Motion, Samsung, Seagate, Sony Ericsson.
ST has received more than 100 awards and accolades worldwide, in the areas of both Quality and Environmental Protection, including the European Quality Award and the Malcolm Baldrige National Quality Award.
We are a world leader in providing semiconductor solutions that help our customers improve quality of life for everyone today and in the future.
Our organization is aligned by business segments. Sales by regions as a percentage of Q2’ 2011 sales.
We also face foreign exchange risk which poses a significant variation of the value of the U.
The fluctuation of the exchange rate between the U.S. dollar and major currencies, such as the Euro, can significantly affect our net income. If the U.S. dollar strengthens against these currencies, it can positively impact our net income since most of our revenues are in U.S. dollars. On the other hand, if the U.S. dollar weakens compared to these currencies, it may negatively affect our net income due to a substantial portion of our costs being in non-U.S. dollar currencies. All in all, fluctuations in currency exchange rates strongly influence our financial results.
Our operations in different jurisdictions entail various costs, such as manufacturing labor, depreciation charges, selling expenses, general and administrative expenses, and R&D expenses. These costs are primarily in the currencies of their respective jurisdictions, mainly the euro zone. To counteract the impact of exchange rate fluctuations on our financial results, we adopt a key strategy: keeping a balance between sales to customers in U.S. dollars and purchases from suppliers in U.S. dollar denominations.
The company’s goal is to decrease expenses, including labor and depreciation, which are quantified in Euros or other currencies. It also acknowledges the presence of market risk caused by fluctuating financial market conditions and its association with foreign currencies through business operations and investing/financing activities. This market risk impacts future profits and the value of assets/liabilities due to cash flows in foreign currencies and the utilization of financial instruments during day-to-day operations.
In order to reduce market risks and manage financial instruments effectively, we have implemented policies, procedures, and internal processes. However, as our business operates internationally, there is a potential for increased risks in the countries where we or our customers and suppliers operate. These risks include adverse economic conditions in foreign economies, instability in foreign governments (such as war, terrorist attacks, or civil unrest), as well as outbreaks of epidemics, pandemics, and other health-related issues.
One risk pertains to the impact of changes in laws and policies on trade and investment. This includes new limitations on investment and trade, as well as differences in practices among regulatory bodies, tax authorities, judicial systems, and administrative agencies.
An illustration of such risk arose on March 11, 2011 when Japan faced a severe earthquake. The repercussions were dire for the northern region of Japan and led to a destructive tsunami that inflicted extensive harm upon major cities along the northeastern coastline.
The tsunami’s impact was observed in Hawaii and along the Pacific Coast of the U.S. As a result, our supply and delivery operations in PAC/Asia have been affected.
There is a risk to our production processes. These processes require advanced equipment that is becoming more expensive. Moreover, they are constantly modified or maintained to improve yields and product performance. Any impurities or challenges in the manufacturing process can decrease yield, disrupt production, or result in losses of product in process.
Although there have been improvements in efficiency, precision, and capacity, our manufacturing capability has encountered occasional challenges like bottlenecks and production difficulties. These problems have resulted in delivery delays and raised concerns regarding quality control. Moreover, there is a potential for these issues to persist and impact future production or transition processes. Additionally, our manufacturing facilities have faced constraints because they operate at full capacity during periods of high product demand.
In addition, any disruptions in production at our manufacturing facilities may result in a delay in transferring production to other facilities. This could potentially lead to customers purchasing products from alternative suppliers, resulting in significant revenue loss and potential harm to customer relationships.
The documents utilized in international trade encompass Commercial Invoices. With the assistance of our IT systems, we are able to process and settle invoices through Accounts Payable Services without the necessity of a purchase order. However, it is important to acknowledge that this procedure does not include invoices pertaining to Freight, Duties, Patents, and administrative fees (such as Fines).
The invoices from Travel Agencies are compared to the relevant TARs (Travel Authorization Request) that are handled in the T&E application. Therefore, they are not included in the current SOP. All company purchases should be made through proper negotiations with third parties in order to establish transaction conditions. The outcome of these negotiations is documented in a purchase order that is generated within STMicroelectronics IT systems and sent to the third parties. The third party is required to reference this purchase order in all communications regarding this transaction (delivery, invoices, etc.).
Etc). 2 Consular Invoices This is a form that is usually only available from the Consulate of the importing country. On this form, the exporter or its agent must provide a detailed description of the goods being shipped. Some countries require this form. The consular invoice includes spaces for the name of the goods, any marks on the goods, the number of items, their weight, the value and origin of the goods, and a declaration that the information provided is accurate. Any erasures, strike-overs, typing changes, pen-and-ink alterations, or additions are not allowed.
In certain countries, specific descriptions of goods are required for customs purposes. 3Custom Certificates Customs Form No. 2 is utilized for the application and release of exports. For exporters utilizing this system, the export application can be completed using an invoice, shipping note, and other supporting documents. The invoice serves as a substitute for the export form, while the shipping note functions as a monitoring form on Customs Form No. 2. When exporting goods to Singapore, the company must complete Customs Form No. 2 and send three copies each of the invoice and shipping note to Customs.
Typically, additional supporting documents must be submitted as usual. This facility allows for export by air or sea. Every forwarded invoice must include the following information: * Clear and complete goods. * Quantity. * Weight/Measurement. * Value. * Export destination. For each shipping note, the following information must be included: * Shipper’s name. * Port of loading. * Port of discharge. * Shipping signage. * Type of packaging. * Concerning goods. * Gross weight. Invoices and shipping notes that meet these conditions are eligible for registration. 4Waybills
The waybill serves as evidence of transportation and acknowledgement of the goods being transported. The company typically employs sea waybills for shipments to Singapore and China, while air waybills are used for shipments to the United States of America and Canada. As stated in the terms and conditions, it is essential for the buyer to furnish the seller with copies of pertinent shipping documents, such as air waybills, within 3 months from the date of shipment. Failure to fulfill this requirement will result in the imposition of UK Value Added Tax as an Associated Cost.
If there are any visible defects, quantity shortages, or incorrect shipments, the seller must be notified in writing within 7 days of receiving the goods. Failure to provide this notification will result in the seller not replacing the goods. However, any claims made by the buyer regarding breaches of warranty for the goods will still be valid. The seller is not responsible for any issues related to the shipment. It is up to the buyer to make necessary claims with carriers for non-delivery, loss, damage, or delay.
The payment methods used are as follows:
For trade with China, a commonly used method is Letter of Credits. To import goods, visit its correspondent bank for information about formalities and costs. In China, Chinese exporters often hire export agents who may also act as third-party suppliers or solely provide export services. Non-compliance with regulations can result in significant costs such as unexpected customs duties (like anti-dumping duties) and potential delays in customs clearance. These delays can lead to expensive storage fees at railway stations or container yards.
Subject to seller approval of buyer’s credit, payment terms for domestic orders are to be paid within thirty (30) days from the date of the seller’s invoice, unless otherwise agreed in writing by an authorized representative of the seller. For international orders, payment terms shall be through an irrevocable letter of credit confirmed with the seller’s correspondent bank. The buyer hereby waives any right to set off amounts due from the seller. Any amounts outstanding on the due date will accrue interest at a rate equal to the lesser of: a) 1.5% per month of the outstanding balance, or b) the maximum allowable interest rate under applicable law. Interest on past due amounts will apply from the date they become due until the seller receives payment from the buyer. The buyer will also be responsible for any expenses associated with collecting past due amounts, including reasonable attorney’s fees and court costs. Additionally, the seller reserves the right to request full or partial advance payment of the purchase price before making deliveries, or to require cash on delivery (C.O.D.)
If the buyer does not make the required advance payment when requested by the seller, or if the buyer fails to pay any amount owed to the seller (regardless of whether it is related to this order) or refuses to accept shipment on a cash-on-delivery (C.O.D) basis, then the seller has the following rights: a) cancel the sales order, b) refuse to make further deliveries, and c) immediately declare all outstanding amounts for goods previously delivered as due and payable. Partial shipments made under any order will be treated as separate transactions, and payment for each shipment should be made accordingly.
However, if the buyer defaults, the seller has the right to refuse further shipments without affecting its rights under the order. The shipping terms used in international trade, called Incoterms, are designated by the International Chamber Of Commerce. These terms outline the costs and responsibilities that parties share once the export contract is agreed upon. STMicroelectronics commonly uses the shipping term Ex-Works (EXW) for exporting and importing products.
The delivery of all Products to the buyer shall be done using the “Ex Works” shipping term. This arrangement places minimal responsibility on the seller and more responsibility on the buyer. In an EX-Works transaction, the goods are available for pickup at the seller’s factory or warehouse, and “delivery” occurs when the merchandise is released to the consignee’s freight forwarder. The buyer is responsible for arranging insurance, export clearance, and handling all other paperwork with their forwarder.
The buyer assumes responsibility for the title and risk of loss of the products once they are collected by the carrier for delivery. It is the buyer’s responsibility to choose the carrier for shipping, and the seller will inform the carrier to pick up the shipment. The seller may choose to ship the goods earlier than the specified date or time for delivery, and may also deliver them in separate parts. Any delivery date or time provided by the seller is only an approximation, and the seller cannot be held accountable for any failure to deliver the goods on that specified date or time.
The buyer cannot consider these Terms and Conditions of Sale as breached if the seller fails to deliver the products. However, if the buyer receives goods with visible defects, a shortage in quantity, or incorrect shipments, they must notify the seller in writing within 7 days. If the buyer fails to do so, the seller will not be responsible for replacing the goods. This paragraph does not affect any claims for breach of warranty that the buyer may have regarding the goods.
Seller shall not be held liable for any issues arising from the shipment. The buyer is responsible for pursuing any claims with carriers for non-delivery, loss, damage, or delay. Another shipping term used by the company is Free Carrier (FCA). Under this term, the seller delivers the goods to a carrier chosen by the buyer. The seller is responsible for arranging transportation but does so at the buyer’s risk and expense.
When it comes to FOB, the buyer has the option of choosing the freight forwarder or carrier. In FCA, however, it is the seller who makes this decision and works directly with the freight forwarder or carrier. The delivery is made at a designated port or destination, and it is the responsibility of the buyer to arrange for insurance.
All wafer-out dates are dependent on the seller receiving fully-approved mask sets and completed purchase orders in a timely manner. The seller’s acceptance of a purchase order indicates their commitment to begin production on the scheduled wafer out date, taking into account the agreed lead and manufacturing cycle time.
Seller will inform the buyer promptly in case of any expected delay and cover the costs for express delivery relating to the delayed shipment of goods. However, seller shall not be held responsible, taking into account these commitments. 3 Free On Board (FOB) applies to domestic shipments unless seller agrees otherwise in writing. Shipments to locations outside the United States shall be delivered using Ex-Works (EXW), following Incoterms 2010, to the buyer’s designated carrier.
Upon delivery, the risk of loss and title to goods will be transferred. Unless otherwise specified in writing, the seller will retain ownership of any software delivered or embedded in the seller’s goods, and its use by the buyer or third parties will require the execution of a license agreement or confidentiality agreement between the seller and buyer. If the seller covers shipping, insurance, or related costs in advance, the buyer agrees to promptly reimburse the seller for these expenses. | |
