GEORGE TOWN: Local semiconductor and electronics manufacturing companies still expect to end fiscal 2022 with improved performance, despite the slowdown in the global semiconductor industry.
For Vitrox Corp Bhdits group chief executive, Chu Jenn Weng, told StarBiz that the group’s semiconductor segment was slowing, but the electronics assembly division, particularly the automated board inspection business, continued to grow. in the second half of this year.
Barring unforeseen circumstances, he noted that the group should make a higher net profit this year due to its earnings in US dollars.
Chun pointed out that Vitrox has also acquired more than 30 new customers globally.
Vitrox is involved in the design and manufacture of innovative, state-of-the-art, and cost-effective automated vision inspection equipment and system-on-chip integrated electronic devices for the semiconductor and electronic packaging industries.
The group’s order book had confirmed purchase orders for more than two months, he added.
“Our outlook with some degree of accuracy shows that the plant will operate at full capacity until mid-November, when the seasonal lull for most plants occurs over the Christmas period.
“Our audio, television and consumer device customers expect stable demand through the end of October due to the lead time for Christmas shopping, Boxing Day and the gift market in Europe and in North America.
“Judging by the last months of 2022 and the excess order book and customer indications, we are confident of achieving our target,” H’ng explained.
According to Pentamaster Corp Bhd Executive Chairman CB Chuah, the group’s electro-optical segment that makes test equipment to verify solid-state smart sensors for smartphones and Internet of Things (IoT) devices was slowing.
“This year, the electro-optical segment will contribute less than 30% of the group’s turnover compared to 40% a year ago.
“Our medical and electric vehicle segments are doing well.
“So far, there is no correction on our orders,” Chuah noted.
He added that inflation and weakening purchasing power had caused the global semiconductor market to slow down, thus affecting the consumer electronics sector.
“The group has secured approximately RM500 million of deliverables from the second half to the first quarter of 2023.
“Customers come from Europe, the United States and Japan.
“We expect to close with a strong performance in 2022 compared to 2021,” he added.
“So far, there is no indication to our clients that there will be a correction in the next 12 months.
“Inflation, high energy cost and rising interest rates are the reasons for the slowdown,” Mui noted.
Research director of the Malaysian Institute of Economic Research, Shankaran Nambiar, said China’s slowing economy will grow by around 3% this year, missing the government’s 5.5% target.
“China’s sluggish growth would negatively impact global consumer electronics demand.
“Semiconductor manufacturing companies in Malaysia would not be spared.
“Companies’ plans to expand, acquire innovative technologies and recruit new workers will have to be put on hold.
“There are already semiconductor and electronics manufacturing companies that have stopped stockpiling,” he pointed out.
Meanwhile, Connecticut-based research house Gartner has forecast global semiconductor revenue to grow 7.4% in 2022, compared to 26.3% growth in 2021, which is down from the previous quarter’s forecast of 13.6% growth for 2022.
“Although chip shortages are easing, the global semiconductor market is entering a period of weakness, which will persist until 2023, when semiconductor revenues are expected to decline by 2.5%,” said Richard Gordon, vice president of practice at Gartner.
“We are already seeing weakness in semiconductor end markets, particularly those exposed to consumer spending.
“Rising inflation, taxes and interest rates, as well as rising energy and fuel costs, are putting pressure on consumers’ disposable income.
“This affects spending on electronics such as PCs and smartphones.”