SAN DIEGO-Fixed wireless developer Axesstel Inc. will spend $2 million to purchase production operations from South Korean manufacturer TBK Electronics Corp., the company said Wednesday.
Axesstel, which designs and develops fixed wireless voice and broadband data products, said it will use the acquisition to establish a manufacturing line in South Korea dedicated for more sophisticated, lower-volume products. Meanwhile, the San Diego-based company will move its higher-volume manufacturing operations from Taiwan to mainland China in July to reduce labor costs.
Axesstel said start-up costs for the production lines will be minimal and expects the moves to begin positively affecting its bottom line by the second half of 2005.
“Our primary strategy is to continue to outsource high-volume production with one or more contract manufacturers,” said Clark Hickock, Axesstel’s chief operating officer. “Moving large volume production to mainland China and establishing specialized manufacturing in South Korea are the first steps in our overall plan to diversify manufacturing capabilities and reduce supply chain costs.”
