Semiconductor players expect good earnings
19 Sep 2022
The local semiconductor and electronics manufacturing companies generally are still projecting to close 2022 financial year with improved performance, despite the decelerating global semiconductor industry.
For Vitrox Corp Bhd, its group chief executive officer Chu Jenn Weng told StarBiz that the group’s semiconductor segment is slowing down, but the electronic assembly division, particularly the automated board inspection business, is still growing strong in the second half of this year.
Barring any unforeseen circumstances, he noted the group is expected to achieve a higher net profit this year due to its earnings in US dollar.
Chun pointed out Vitrox had also acquired more than 30 new customers globally.
Vitrox is involved in the design and manufacturing of innovative, leading-edge and cost-effective automated vision inspection equipment and system-on-chip embedded electronics devices for the semiconductor and electronics packaging industries.
The group’s order book had confirmed purchasing orders of over two months, he added.
“Our outlook with some degree of accuracy shows that the factory will operate at total capacity until mid-November, when the seasonal lull for most factories occurs for the Christmas period.
“Our audio, television, and consumer appliances customers are forecasting a steady demand from now until late October due to the lead time to stock up for Christmas shopping, Boxing Day and gifts market of Europe and North America.
“Judging from the past months of 2022 and the order book surplus and customers’ indications, we are confident of achieving our target,” explained H’ng.
According to Pentamaster Corp Bhd executive chairman CB Chuah, the group’s electro-optical segment which manufactures test equipment to check smart semiconductor sensors for smartphones and Internet of things (IoT) devices was slowing down.
“This year, the electro-optical segment will contribute less than 30% to the group’s revenue compared with 40% a year ago.
“Our medical and electric vehicle segments are doing well.
“So far, there’s no correction on our orders,” Chuah noted.
He added inflation and weakening purchasing power had resulted in the slowdown of the global semiconductor thus affecting the consumer electronics sector.
“The group has secured about RM500mil worth of products to be delivered in the second half till the first quarter of 2023.
“The customers are from Europe, the United States and Japan.
“We expect to close with a strong performance in 2022 over 2021,” he added.
“So far, there isn’t any indication from our customers that there will be a correction in the next 12 months.
“Inflation, high energy cost, and escalating interest rates are reasons behind the slowdown,” Mui noted.
Malaysian Institute of Economic Research head of research Shankaran Nambiar said the decelerating Chinese economy would grow at about 3% this year, missing the government’s 5.5% target.
“China’s sluggish growth would negatively impact the global demand for consumer electronics products.
“Semiconductor manufacturing companies in Malaysia would not be spared.
“The plans by companies to expand, acquire innovative technologies, and recruit new workers will have to be put on hold.
“There are already semiconductor and electronic manufacturing companies that have ceased stockpiling,” he pointed out.
Meanwhile, the Connecticut-based Gartner research house has forecast that the global semiconductor revenue would grow 7.4% in 2022, down from 2021 growth of 26.3%, which is down from the previous quarter’s forecast of 13.6% growth for 2022.
“Although chip shortages are abating, the global semiconductor market is entering a period of weakness, which will persist through 2023 when semiconductor revenue is projected to decline 2.5%,” said Richard Gordon, practice vice-president at Gartner.
“We are already seeing weakness in semiconductor end markets, especially those exposed to consumer spending.
“Rising inflation, taxes and interest rates, together with higher energy and fuel costs, are putting pressure on consumer disposable income.
“This is affecting spending on electronic products such as PCs and smartphones.”
Source: The Star