Business News

Published: Monday August 25, 2014 MYT 12:00:00 AM
Updated: Monday August 25, 2014 MYT 8:20:50 AM

Pentamaster sees double-digit growth as order book rises

Chuah checking out a test equipment. Pentamaster has started delivering semiconductor test  equipment that are capable of checking micro-electromechanical systems sensors used in smart  mobile devices.

Chuah checking out a test equipment. Pentamaster has started delivering semiconductor test equipment that are capable of checking micro-electromechanical systems sensors used in smart mobile devices.

GEORGE TOWN: Semiconductor equipment manufacturer Penta-master Corp Bhd is expecting a strong double-digit percentage growth for the second half of 2014 over the same period a year ago.

Group executive chairman C.B. Chuah told StarBiz that the company’s order book for the second half was almost full due to strong demand in the third quarter from the United States, Japan and China.

“In the third quarter, we secured about RM25mil worth of semiconductor test equipment orders, which has already filled up the order book for the period. In the fourth quarter, so far, we have roped in about RM10mil in sales.

“Last year, for the whole of second half, the sales achieved was RM30mil,” he said.

Chuah said that for the second quarter, the group had delivered about RM27mil worth of orders.

On new products, Pentamaster had started delivering semiconductor test equipment that were capable of checking micro-electromechanical systems (MEMs) sensors used in smart mobile devices.

The orders are for the group’s Japanese, South Korean and American integrated circuit (IC) and micro-electromechanical system (MEMs) sensor manufacturing customers.

“The challenge now is to produce test equipment that could test multi-functional sensors, which requires a longer test time. Smart devices are now using multi-functional sensors, which means that testing more sensors per hour is no longer the objective.

“This new range of semiconductor test equipment, priced at around US$180,000 to US$200,000 each, is expected to generate the bulk of the semiconductor test equipment contribution to the group. The semiconductor segment generates about 50% of the group’s revenue annually,” he added.

On the group’s light-emitting diode (LED) test equipment business, Chuah said it would focus more on the automotive segment than the general lighting market. “We have locked in orders of more than RM10mil of such equipment this year, which is an improvement over 2013.

“This year the LED test equipment segment is expected to generate about 15% of the group’s revenue,” he said.

On its glove manufacturing machine business, Chuah said the segment would contribute about 20% of the group’s business in 2014, compared to less than 10% in 2013.

“We have secured about RM15mil of orders for our new range of glove manufacturing machines for US medical glove makers,” he said.

For the second quarter ended June 30, 2014, the group posted RM2.2mil in net profit on the back of RM26.6mil in revenue, compared to RM778,000 and RM17.2mil achieved in the same period last year respectively.

According to Yole Développement, a marketing, technology and strategy consulting group with worldwide offices, the MEMS market is positioned to grow at a compounded annual growth rate of 16% per year through 2014, rising to a US$14bil.

The Connecticut-based Gartner reported that worldwide semiconductor capital equipment spending was projected to total US$38.5bil in 2014, an increase of 15% from 2013 spending of US$33.5bil.

“Capital spending will increase 7.1% in 2014 as the industry begins to recover from the recent economic downturn and total spending will follow a generally increasing pattern in all sectors through 2018.

“The positive outlook for capital spending in 2014 is a result of strong demand across most semiconductor segments. Strong anticipated sales in the smartphone and ultramobile product areas are stimulating investment in the more advanced logic facilities,” Gartner says.

Tags / Keywords: Stocks, Earnings, Corporate News, Investing, Semiconductor, Pentamaster Corp

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