Unisem upbeat on prospects for H2

  • Business
  • Saturday, 31 May 2003

Unisem (M) Bhd is more upbeat about its prospects for the second half and is looking forward to a better year in 2003, after having posted its worst performance in the past two years, said chairman and managing director John Chia. 

Chia told reporters after the company's AGM in Kuala Lumpur yesterday that recent feedback from its clients indicated the worst could be over for the global semiconductor and electronics industry, as many (of its clients) were more optimistic about their business prospects for the second half. 

As such, many were expected to beef up later this year their inventory levels, currently running at an historical low since the technology bubble burst in 2000. 

John Chia

In addition, more integrated device manufacturers (IDMs) were expected to outsource their operations to integrated circuit (IC) subcontractors such as Unisem as semiconductor sales picked up in the second half this year, Chia said. 

“We do see this year to be better than the last two years. Although there’s no clear visibility (of a recovery) yet, there’s more certainty now and players are more optimistic about their future,” he added. 

However, Chia remained non-committal as to whether Unisem would turn around in the current year to Dec 31, after posting two consecutive years of losses since 2001. 

But he said the main driver of growth this year would still be its traditional core customers in the consumer electronics, personal computers and cellular phone industries. 

Chia also said Unisem, the core business of which was chip assembly and final test and IC subcontracting, would upgrade its service offering to provide greater value-added services to its customers. 

“We hope this will improve our average selling price and in turn our margins,” he added. 

Chia also said Unisem had decided to put on hold its proposed US$150mil bond issue in view of the current unfavourable conditions. In addition, Unisem was currently in no need of funds as the bulk of its capital expenditure had more or less been completed, he said. 

For the year to Dec 31, 2002, Unisem's pre-tax loss widened to RM8.5mil from RM1.06mil despite a higher turnover of RM222.6mil compared with RM187.9mil in 2001. 

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