History (1996): More on Singapore Technologies

Singapore Technologies (ST), at last, has been revealed as the closely-guarded secret and buyer of Micropolis’ (Chatsworth, CA) HDD assets for a cash payment estimated at $40 million plus $7 million for the value of intangibles, including the name Micropolls.

The final agreement is subject to approval by Micropolls shareholders, with a target closing date of March 29. The remaining business of the California company will be renamed StreamLogic.

Who exactly is ST, until now a complete unknown in the storage industry? This government-owned company began in 1967 to provide a fledgling industrial capability for the newly independent Republic of Singapore.

Its current CEO, Dr. Yeo Ning Hong is a former minister – it is not hard to imagine that Micropolis’ competitors, which are plentiful in this country (Seagate, IBM, Quantum’ MKE, Western Digital), the primary source of the world’s HDDs, will scarcely appreciate a new government-backed competitor.

ST has very diverse activities: defense, aerospace, automotive, electronics, financial services, information technology, etc.

The conglomerate had a turnover of S$3 billion last year (S$1.4=$1), up 20% from 1994, and employs more than 16,000 personnel in its 90,000 subsidiaries in the Pacfic Rim, USA and Europe.

It would seem, in fact, that Micropolis’ offering was long in the making. The HDD manufacturer was on the brink of Chapter XI proceedings, having terminated its year with nearly $84 million in losses for $211 million in sales. A taker was desperately required. Over the last ten years, Micropolis lost nearly $130 million of which nearly $135 million was in the last 3 years alone.

ST no doubt opposed the idea that yet another HDD manufacturer fall into the hands of a Korean firm. Moreover, for some time now, Singapore has been looking for a way to expand its role in the industry from that of a mere site for foreign factories to one of developing its own technological know-how, even more so that other Asian countries are competing with lower labor costs.

Furthermore, Singapore had a vested interest in Micropolis. CDC-Construction & Development, a unit of ST Industrial Corp. held a S$41 million contract with Micropolis to build a new 302,000 square foot facility in Seragoon North, expected for 2Q96 to replace a leased factory nearby, in Ang Mo Kio.

In order to assure the project’s completion, ST recently recruited former Conner SVP Joe Chen, now senior officer with the ST subsidiary, Chartered Semconductor Manufacturing. It seems he will be joined in this activity by other key executives from Conner and IBM. Chen himself will head Micropolis Pte . Ltd., ST’s new subsidiary focused on disk drives.

ST is also acquiring a second Micropolis plant in Thailand.

The rest of Micropolis, that is, its subsystem activity, which represents only about 20% of its sales (Raidion disk arrays, video servers, external storage devices such as Microdisk), will have a new name, StreamLogic. Larry Smart, who was president, COB and CEO of Micropolis, will continue on in the same functions at StreamLogic.