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Pentamaster investing Rm120mil in new plant

Pentamaster investing Rm120mil in new plant

18 Oct 2021

Penang facility to expand five core business areas

Pentamaster Corp Bhd is investing Rm120mil in a new 500,000-squarefeet plant in Batu Kawan, Penang to increase production capacity as demand for automation solutions soar.

The new plant – its third – will be built on a 12-acre site to expand its five core business areas.

“We need a third plant as our current manufacturing facilities on the island and Batu Kawan are running at 100% capacity.

“This new facility will expand the group’s automation business serving the industrial, medical device, logistics, smartphone and automotive sectors.

“The industrial, smartphone, and automotive segments contribute about 60% to the group’s revenue and the remaining sectors, 40%.

“Construction of the third plant will start in January 2022 and is scheduled to start operations in early 2023.

“The project will generate at least about 300 jobs for engineers,” group chairman C B Chuah told Starbiz.

According to Chuah, the group has about Rm300mil worth of semiconductor test equipment and automation products to ship out from now till the first quarter of 2022.

The group shipped out Rm250mil worth of semiconductor test equipment and automation products in the first half of this year.

“The semiconductor test equipment business catering to the smartphone and automotive industries is a growing sector.

“The global semiconductor test equipment market size is projected to grow at a 3.1% compounded annual growth rate (CAGR) between 2020 and 2026.

“Our expansion exercise will enhance our competitive edge during this growth period,” he said.

According to the 360 Research Reports, the semiconductor test equipment market is expected to reach Us$4.6bil (Rm19.13bil) by 2026 from Us$3.8bil (Rm15.80bil) in 2020.

“To seize more markets, small and medium companies must expand their technology, capital investment and brand influence.

“Such (tech and automotive) companies need to overcome challenges and maintain a leading position, so they will be spending more on test equipment to accelerate technological innovation and product upgrades.

“In the future, the semiconductor test equipment market will remain a highly competitive market,” he added.

Chuah said the group recently secured a few smartphone projects from international brand name manufacturers.

“We will be customising semiconductor test equipment for them to check their sensors. The equipment, worth around Rm100mil, will be delivered in this fourth quarter and early next year,” he said.

Chuah added that the raw material shortage facing the semiconductor industry was getting severe.

“It used to be that we can deliver test equipment and automation products in 10 weeks. Now the lead time has to be extended to more than 20 weeks,” he said.

According to International Data Corp (IDC), shipments of smartphones are expected to grow 7.4% in 2021, reaching 1.37 billion units, followed by 3.4% growth in 2022 and 2023.

Chuah said the growth could be attributed to a healthy 13.8% growth from IOS devices combined with 6.2% growth from Android.

“Although Covid-19 drastically impacted 2020 shipments, 2021 shipments have managed to display minimal growth compared to 2019 (pre-pandemic) volumes, giving us a more accurate view of the state of the market.

“The world’s largest markets – China, the United States and Western Europe – will still be down from 2019, but growing markets such as India, Japan, the Middle East, and Africa are fuelling the recovery,” the report added.

Source: The Star

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