Universal Electronics Inc. is carrying out a program to reduce its operations in Mexico with a plan to become more efficient.

With manufacturing operations in Monterrey, the company is engaged in the design and manufacture of remote control and smart home technology products and solutions in China, Mexico, Vietnam and Brazil.

The company assesses its global manufacturing footprint based on its long-term factory planning strategy to reduce the risk of its dependence on a PRC-based supply chain and reduce its manufacturing capacity due to declining demand and a change in the mix of its products. 

As part of this assessment, Universal Electronics opened a new factory in Vietnam, which began manufacturing operations in June 2023 after incurring start-up costs in the first half of 2023. 

Universal Electronics

With this factory in Vietnam now open and meeting near-term operational targets, with the expectation of continuous improvement, the company halted manufacturing activities at its factory in southwest China in September 2023 and has substantially completed its closure. 

Universal Electronics is also working to reduce the size of its manufacturing facility in Mexico due to declining demand in its U.S. market and the capacity of its Vietnam facility to supply its North American customers. 

As a result of these decisions, the company has recorded impairment charges of $7.7 million and severance and other restructuring charges of $4.0 million during the year ended December 31, 2023.

Products

The company continues to evaluate its Mexican facilities as part of its long-term factory planning strategy. 

It is currently planning to downsize and optimize operations in Mexico by moving to a smaller, more efficient facility. 

As such, the company expects to begin operations in this downsized facility in the second quarter of 2024, which may result in a significant amount of severance and moving costs. 

Today its portfolio includes universal control products compatible with Apple‘s tvOS and Google’s AndroidTV platforms designed for the multichannel video programming distributor market that enable subscribers to access subscription-based channels through hybrid and OTT streaming platforms.