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Eye for detail: Chuah checking out test equipment produced for the automotive and semiconductor industries.
Strong sales seen for second quarter after a slow first quarter
THE semiconductor test and vision inspection equipment makers in the country are projecting a strong second quarter of 2016, following a slow first quarter, in line with the projection of SEMI South-East Asia.
The companies expecting a strong second quarter are
MMS Ventures expects to deliver test equipment for the automotive and smart device industries with a market value of RM16mil in the second quarter compared with RM11mil from the same period last year.
“Both the automotive and smart device industries contribute 60% to group revenue.
“As for the third and fourth quarters, there is no visibility yet, because orders usually come in three months before the delivery.
“We should see orders for the third quarter arriving in May. The test equipment would need to be shipped out by August and September,” its managing director T.K. Sia says.
Pentamaster Corp Bhd executive chairman C.B. Chuah says the group would deliver approximately RM40mil of test equipment in the second quarter of 2016.
“About 30% of the test equipment are for the automotive segment, while the remaining for the smart devices.
“We are projecting a double digit percentage growth for our revenue and bottomline in 2016,” he adds.
In the first quarter 2016, the group delivered about RM30mil of test equipment, according to Chuah.
In the second quarter, Elsoft Research expects to deliver 40 units of test equipment priced between US$100,000 and US$200,000 per unit for customers in the automotive, smart devices, and general lighting segments.
“The customers are in Malaysia, Thailand, China, and Taiwan.
“There is no visibility yet for the second half,” says Elsoft chief executive officer C.E. Tan.
Vitrox Corp chief executive officer Chu Jenn Weng, meanwhile, says that the second quarter is expected to improve over the same period of a year ago.
“We had a very good first quarter 2016, even though the first period is traditionally a soft quarter.
“For this reason, we are confident of a good second quarter compared to last year’s second period.
“As of now, we have more than RM25mil worth of backlog orders for vision inspection equipment to be delivered in the second quarter,” he adds.
SEMI South-East Asia has recently forecast that the capital expenditure for the fab equipment manufacturing sector in South-East Asia would grow to US$1.8bil (RM7bil) in 2016 from US$1bil (RM3.9bil) in 2015.
Its president Ng Kai Fai says this would have a positive impact on the test equipment industry in South-East Asia.
“The capital expenditure for the test equipment sector in South-East Asia is projected to increase to US$580mil in 2016 from US$530mil, creating spill-over effects for the test-equipment and the electronic manufacturing cluster in Penang,” Ng explains.
SEMI is the global industry association serving the manufacturing supply chain for the micro- and nano-electronics industries.
The Free Industrial Zone, Penang, Companies’ Association (Frepenca) chairman Dr Roland Mueller says that based on the members feedback obtained in the first quarter of 2016, some 57% of the members expect results to improve in the second half of 2016.
“This is an improvement over the survey done in the fourth quarter 2015 which showed that 36% of the members were optimistic of achieving better results in the second half of 2016,” Mueller says.
However, the overall prevailing mood in the semiconductor and electronics industry is still cautious, Mueller says.
“The first quarter survey also showed that some 57% of the members have indicated that they do not plan to engage new workers and may also reduce the size of the workforce this year, compared to 43% of the members with plans to engage new headcount in 2016.
“The percentage of members with plans to introduce new products in 2016 have also dropped slightly to 71% from the 73% surveyed in the fourth quarter 2015.
“Those with plans to invest fresh capital to adopt new technologies this year have also declined slightly to 70%.
“In the fourth quarter 2015, some 75% indicated that they were keen to adopt innovative technologies with new capital investments,” Mueller says.
The recent ban on foreign workers into Malaysia is one of the reasons for the prevailing cautious mood of the manufacturing industry, according to Mueller.
“The manufacturing sector, across the board, is very dependent on foreign workers.
“If there is a shortage of foreign workers, our members would not be able to plan for expansion.
“This is why there are some members who have indicated that they may cut down the size of their investments in Malaysia and relocate to neighbouring countries, in light of the shortage,” he adds.
The Frepenca companies, comprising 70 local firms and multinational corporations from the United States and Europe, are involved in the semiconductor and electronics industries.
Read more at http://www.thestar.com.my/business/business-news/2016/04/23/semicon-support-firms-upbeat/#X0rY0bC8U9UFqOoJ.99