3 Aug 2012
Malaysia's chip makers confident
|Better-placed Malaysian chip makers. (Photo courtesy of ©iStockphoto.com/ crstrbrt)|
The book-to-bill ratio - which indicates that more orders are received than filled - is expected to dip to below one, but only during the final quarter.
Following a sluggish Q1, these companies experienced growth in Q2 with a healthy book-to-bill ratio of one, due to new technological products.
Sales in Q3 are expected to remain flat, maintaining the same level as Q2.
Moving into Q4, sales will likely dip due to the European crisis, unemployment in the US and a troubled China economy, said manufacturers.
Malaysian chip makers are the "new kids on the block", moving to replace some China manufacturers on the global scene, as well as moving ahead of several Taiwan and Japanese semiconductor firms on price, or even better value chips.
Malaysian manufacturer Mini-Circuits Technologies Sdn Bhd said the company had done well in Q2, registering double-digit growth over Q1 and the previous corresponding quarter, because of its introduction of new radio frequency (RF) chips.
President Datuk Seri Kelvin Kiew said: "despite a worsening global economy, we decided in the second half last year not to cut back on expenditure to develop new products."
"We invested US$20 million to develop the next generation of high-powered RF chips that are able to transmit signals at longer distance with higher speed and minimal disturbance," Kiew explained.
These chips, used in telecommunication substations and mobile devices, quickly found orders with customers and attracted new ones , said Kiew, which boosted sales in Q2.
Innovative products that offer the best value and solutions to customers, coupled with effective marketing strategies, are key to adding new market share during economically-challenging times, said Kiew.
However, the final quarter of 2012 is expected to be sluggish, mainly due to the worsening economies of Italy and Spain.
Kiew expected Mini-Circuits to hit revenues of US$300 million this year compared to US$240 million last year. But that's not looking likely, even though the firm is reasonably content with a tough year.
Another prominent Malaysian chipmaker, Globetronics Technology Bhd, also believes the book-to-bill ratio of one point might not be sustainable in the fourth quarter.
"This is because Q4 is usually softer as most of the orders for consumer electronic products to supply for the Christmas period would have already come in during the third quarter," said CEO Heng Huck Lee.
Heng said the group expected sales to remain strong and stable as in the second quarter.
"The stability of raw material prices such as gold and copper, essential ingredients for chips, has also enabled the group to produce cost-effectively and price its chips more attractively," he added.
Meanwhile, Pentamaster Corporation Bhd Executive Chairman CB Chuah said his group expected its new range of automated semiconductor equipment to continue driving sales in Q3.
Since Q2, the group has released into the market new generation of high speed automated semiconductors such as "pick and place" and "test handling" applications capable of handling more than 40,000 units of chips per hour, which are priced on the international market at around US$150,000 to US$200,000 per unit.
"These are the group's latest products sold to customers in Europe and the US, which helped to maintain our book-to-bill ratio at 1 point in Q2, compared to a book-to-bill ratio of 0.5 in Q1," said Chuah.
Chuah said the weakening Euro had eased the cost of importing raw materials, such as passive and active electronic components, for the production of the group's automated equipment.
According to the San Jose-based Semiconductor Equipment and Materials International (SEM), the global industry association serving the manufacturing supply chain for the micro and nano-electronics industries, the book-to-bill ratio of North America-based manufacturers of semiconductor equipment from January to May hovered at between 0.96 and 1.05.
According to the World Semiconductor Trade Statistics (WSTS) Spring 2012 global semiconductor sales forecast, the industry's worldwide sales will hit US$301 billion this year, a 0.4% increase over the 2011 sales total, compared with an earlier projection of a 2.6% increase.
Regionally for 2012, WSTS projects year-over-year growth in the Americas to be 3.2%, Japan 1.7%, the Asia Pacific region 0.1%, and Europe -3.5% due to the downturn.
Semiconductor Industry Association (SIA) President and CEO, Brian Toohey, said the outlook for the global semiconductor industry continued to be one of cautious optimism.
from Tan Khai Shien, Kuala Lumpur Office
|Globetronics Technology Bhd||Tel: (60) 4-210-8833
Fax: (60) 4-210-8831
|Mini Circuits Technologies Sdn Bhd||Tel: (60) 4-646-2828
Fax: (60) 4-642-6233
|Pentamaster Corporation Bhd||Tel: (60) 4-646-9212, (60) 3-8998-2112
Fax: (60) 4-641-5600, (60) 3-8996-3212
|Semiconductor Equipment and Materials International (SEMI)
||Tel: (1) 408-943-6900
Fax: (1) 408-428-9600
|Semiconductor Industry Association (SIA)||Tel: (1) 202-446-1700
Fax: (1) 202-216-9745
|World Semiconductor Trade Statistics (WSTS)||Web: http://www.wsts.org|