Ace is potential partner for European telecom equipment maker's contract making

Ace Technologies is taking part in the contract making project given by a global telecom equipment maker based in Europe, TheElec has learned.

The South Korean telecom component maker was chosen as a joint development manufacturer, or JDM, by the European telecom equipment maker late last year as well.

This time around Ace is being reviewed to possible take part of the European conglomerate’s electronics manufacturing service, or EMS, project.

EMS partners only produce products that are already developed by their client.

The client decides the components and their makers for the goods that will be contract produced by the partner. For example, Foxconn is a EMS partner for Apple in iPhone.

EMS partners usually handle more volume that JDM partners, but JDM partners usually have higher profitability.

Ace started production for goods for the JDM project this month. 

It will decided next month whether the South Korean company will take part in the EMS project for good.

Ace’s sales from contract making was very small compared to compatriot telecom component maker KMW, a person familiar with the matter said, and how much sales boost it can secure from the EMS project remains to be seen.

The European telecom equipment’s total EMS project is thought to be worth 700 billion won.

Partners will make telecom equipment that are already commercialized. Production will begin later this year.

Jabil and Flextronics of the US was also eyeing the EMS order, the person said.

According to Omdia, contract making market for telecom equipment was worth US$6.7 billion in 2017. Ace Technologies had a market share of 16% then, the research firm said.

Ace’s sales mostly game from antenna filters and antenna for base stations. The filters were provided to customers such as Samsung Network who adds data processing component to make radio systems out of them.

Antenna for base stations were supplied to carriers directly.

Ace posted 102.5 billion won in sales in the first half of 2020 __ but it posted operating loss of 27.8 billion won. Its rival KMW, which it competes for order from Samsung Network, posted 204.7 billion won in sales and 28.6 billion won in operating profits during the same time period.

KMW is supplying its 5G wireless radio system to Nokia. The two jointly developed the goods.