KESM confident revenue can surpass RM300m in FY17

PETALING JAYA: Semiconductor burn-in and test specialist, KESM Industries Bhd, is confident of delivering another year of record revenue for the financial year ending July 31, 2017 (FY17).

Executive chairman and chief executive officer Samuel Lim Syn Soo said the company was revving to cross the RM300 million sales mark in FY17, by focusing on growing opportunities in the automotive segment of the semiconductor industry.

He said the automotive semiconductor market was expected to grow at a compounded rate of 6.8% a year to reach nearly US$30 billion in 2019 compared with US$20 billion in 2016.

"I'm looking forward to a better year for KESM this year.

"We want to maintain our leading position in the industry and expand our market share.

"We are working with manufacturers to become the number one in the league, that is our goal," he told reporters after the group's AGM in Petaling Jaya on Wednesday.

The company recorded a record revenue and earnings in 2016 of RM285.7 million (up 9% over FY15) and pre-tax profit of RM36.2 million (up 50%).

Lim said KESM was currently the world's largest independent burn-in and test service company and had handled and shipped nearly a billion 'burn-in and test' devices.

With the automotive industry now trending towards hybrid, electric, automate and ultimately into autonomous, as projected by 2030, Lim said KESM was constantly engaged with its customers and looking at new products launches.

"We will have more complex chips coming in... more sophisticated, suitable for high performance capability.

"More stringent quality standards would be require to ensure functionality and reliability. We are excited about this as it would bring more revenue to us," he said.

Lim added that the company was not directly affected by the weakening ringgit and Bank Negara's ruling that required exporters to convert 75% of their export earnings into ringgit, as KESM's dealings were with local customers.

"We do not make the chips, we just provide the (burn-in and test) services.

"Our customers eventually export the products," he clarified.
 
On capital expenditure (capex), he said KESM would likely spend between RM82 and RM90 million in FY17, roughly similar to its historical investment plan and capex pattern, for capacity expansion and machine maintenance. - Bernama