GEORGE TOWN: Semiconductor test-equipment maker MMS Ventures Bhd is riding on strong global demand for smartphones and electronic gadgets.

Shipment of its test machines had reached 150 units during the first six months of this year, compared with 196 units recorded for the whole of 2016.

The company would deliver 100 new units before the end of the year, group managing director Sia Teik Keat told StarBiz.

“We are very optimistic about our performance for 2017,” he said.

In the first quarter of 2017, the group posted RM4.1mil in net profit on the back of a RM14.9mil turnover.

“The second quarter results should improve over the first quarter,” Sia said.

Last year, the group generated RM9.6mil in net profit on the back of a RM40mil turnover.

About 60% of the test equipment produced by MMS Ventures are made for the smart phone industry to test the flash light-emitting diode (LED) and sensor functions.

“The remaining 40% goes to the automotive and general lighting industries,” Sia said.

He said 60% of the orders are from multinational corporations in Malaysia for 2017. “The remainder are sent to China and the US,” he added.

Sia said all the test equipment from MMS were custom-made to meet the customers’ requirement.

“About 80% of our orders are for test equipment priced between US$50,000 to US$150,000, while the remaining 20% are priced above US$150,000,” he said.

On foreign exchange gains, Sia said the group would not benefit much from foreign exchange differences due to the fluctuations of both the ringgit and the greenback.

On future expansion of its plant in Bayan Lepas, Sia said the group was currently utilising 85% to 90% of the production floor.

“In the next 12 months, there may be a need to utilise another 10,000 sq ft for a new assembly line,” he said.

According to SEMI, the worldwide sales of new semiconductor manufacturing equipment are projected to increase 19.8% to US$49.4bil in 2017, marking the first time that the semiconductor equipment market has exceeded the market high of US$47.7bil set in 2000.

SEMI is a global industry association of companies that provide equipment, materials and services for the manufacture of semiconductors, photovoltaic panels, LED and flat panel displays, micro-electromechanical systems, printed and flexible electronics, and related micro and nano-technologies.

“In 2018, a 7.7% growth is expected, resulting in another record-breaking year totaling US$53.2bil for the global semiconductor equipment market,” SEMI reported.

Meanwhile, American research and advisory firm Gartner said the worldwide semiconductor capital spending is projected to increase 10.2% in 2017 to US$77.7bil.

“This growth rate is up from the previous quarter’s forecast of 1.4% due to continued aggressive investment in memory and leading-edge logic, which is driving spending in wafer-level equipment,” Gartner said.

According to Gartner’s latest view, the next cyclical down cycle will emerge in 2018 to 2019 in capital spending, compared with 2019 to 2020 in the previous quarter’s forecast.

“Spending on wafer fab equipment will follow a similar cycle with a peak in 2018. While the most likely scenario will still keep positive growth in 2018, there is a concern that the growth will turn negative if the end-user demand in key electronics applications is weaker than expected,” said Gartner research vice-president Takashi Ogawa. 

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