AD Chips to Begin Construction of New Pocheon Factory Next Month... "Enhancing Profitability Through Cost Reduction"

[Asia Economy Reporter Yoo Hyun-seok] AD Chips announced on the 31st that construction of a new factory for manufacturing commercial and medical refrigerators, to be built on a site located in Pocheon, Gyeonggi Province, will commence next month.

A company official stated, “Some design and site modification permits for the Pocheon new factory are expected to be finalized soon, and we plan to start full-scale construction from next month,” adding, “Once the new factory is completed, we will be able to consolidate the factories and warehouses scattered around Pocheon into one, which is expected to maximize profitability through cost reduction.”

AD Chips operates its core semiconductor design and manufacturing business alongside its refrigeration division, which manufactures and distributes refrigerators. The company produces commercial refrigerators and showcases, selling products through OEM (Original Equipment Manufacturer) and online shopping malls.

In 2018, AD Chips purchased approximately 44,000 pyeong of land in Soheul-eup, Pocheon-si, Gyeonggi Province, to promote the construction of a new factory for commercial and medical refrigerator manufacturing. The strategy is to relocate existing factories and warehouses near Pocheon to the new factory to reduce unnecessary costs. Upon completion, the new factory is expected to reduce annual expenses by more than 1 billion KRW in rent, labor, and transportation costs, thereby improving the profitability of the refrigeration division.

AD Chips plans to secure a separate space within the new factory for research and development of new refrigerator products. In addition to existing commercial and medical refrigerators, the company aims to expand its product portfolio by developing various new products such as unmanned refrigerators, delivery refrigerators, and upgraded vaccine storage medical refrigerators.

A company official added, “The funds secured through a paid-in capital increase will be used for the construction costs of the new factory,” and “Some parts of the land where the new factory is being built can be leased to generate rental income, which is expected to be a significant financial benefit.”