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KESM Industries confident automotive semiconductor industry will recover

KESM Industries confident automotive semiconductor industry will recover

27 Oct 2020

KESM Industries Bhd is confident that the automotive semiconductor industry will recover in view of more optimal vehicle hardware and software adoption integration.

“There is massive opportunity for this segment which could see strong growth from US$40 billion (US$1 = RM4.16) in 2019 to as much as US$200 billion by 2040 as more and more vehicles will adopt electronics and the optimal integration of hardware and software across the car-to-cloud system,” it said in a filing with Bursa Malaysia today.

It said the semiconductor industry is highly cyclical although the company’s focus on the automotive segment is more resilient than other segments such as personal computers and consumer markets.

However, it said KESM’s performance may be affected by the challenging macroeconomic environment and the growing protectionism of trade pacts amongst countries that may impact global trade, and hence, the worldwide gross domestic product growth.

“The outlook for the worldwide semiconductor industry remains sluggish. According to a leading industry analyst firm, revenue is expected to contract 2.4 per cent in 2020.

“Historically, we remained profitable despite the many downturns in the global semiconductor industry, as well as the various financial crises and economic slowdowns.

“We are optimistic that we will continue to perform well as the semiconductor industry indicators return positively,” said KESM.

It said the company will continue its efforts to strive for greater productivity through innovation and factory automation with a close watch over its costs, as it works towards increasing value-add for its customers.

Source: Bernama Posted on : 27 October 2020