EV segment to drive Pentamaster growth - MIDA | Malaysian Investment Development Authority
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EV segment to drive Pentamaster growth

EV segment to drive Pentamaster growth

16 Jan 2023

Pentamaster Corp Bhd expects its supply of semiconductors testers to the electric vehicle (EV) business will drive the group’s growth this year.

Group executive chairman C.B. Chuah told StarBiz the group had a backlogged order of about RM500mil to deliver until the third quarter.

“About half of the orders for semiconductor testers come from the EV segment, which will generate about 40% of the group’s revenue, overtaking the smartphone business which is expected to contribute less than 15% this year,” he said.

Pentamaster manufactures semiconductor testers to check chips, sensors and power components used by the electronics, automotive and medical device industries.

According to the international research house Statista, the revenue of the EV segment will hit US$457.6bil (RM1.98 trillion) in 2023.

The EV market will grow at a compounded annual growth rate of 17% between 2023 and 2027, resulting in a market size of US$858bil (RM3.72 trillion) by 2027.

EV market’s unit sales are expected to reach 16.2 million vehicles in 2027.

Global smartphone shipments are estimated to reach 1.18 billion units in 2022, a 10.7% year-on-year (y-o-y) decrease compared to 1.32 billion units in 2021, according to Digitimes data.

“Digitimes forecast global smartphone shipment will increase slightly to 1.2 billion units in 2023, a y-o-y growth of 2.3%,” Chuah said.

He added that high inflation and the drop in purchasing power will cause the decline.

“Negative factors from 2022, like the high global inflation caused by the Russia-Ukraine war and a strong US dollar generated by the Fed’s aggressive rate increases, have resulted in a significant drop in purchasing power, especially among emerging markets.

“Their impact will still linger, limiting how much the smartphone market can bounce back. More major growth is likely only in 2024,” he added.

Chuah said Pentamaster would tender out the construction of its RM200mil plant this month.

“We are targeting the completion of the first phase in late 2023,” he said.

For the nine months of 2022, the group posted RM59.6mil in after-tax profit on RM453mil turnover compared to RM53mil profit on RM385mil turnover in the previous year’s corresponding period.

According to Chuah, the group is optimistic about concluding the financial year by achieving another record year of growth.

“During the financial period under review, except for the group’s electro-optical segment, all other industry segments witnessed encouraging growth, which has contributed positively to its automated test equipment and factory automation solutions segments.

“The group particularly finds the automotive and the medical devices segments having strong positive momentum heading towards next year, barring any significant deterioration in the global economic situation and geopolitical risk,” he said.

Underpinned by the rapid growth and intensifying trends in automotive electrification, the group’s automotive segment will be the central strategic pillar that will pilot performance and development in the mid to immediate term.

“Given the volatility and having learnt from the past, we will continue to leverage on our internal supply chain strategies to secure critical parts and long lead material items to smoothen its project delivery while delivering its orders on hand as scheduled,” he said.

Source: The Star