Despite the growing uncertainties in the global economy, especially given the escalating trade war between China and the US, Mi Equipment Holdings Bhd remains optimistic on the prospects of the semiconductor industry.
As Mi Equipment group CEO and executive director Oh Kuang Eng sees it, the encouraging outlook of the global semiconductor will continue to be driven by the growing demand for electronic products, which in turn, supports the demand for semiconductors and related equipment.
“The global supply chain structure for the semiconductor industry is very entrenched and cannot be easily changed in the short-term due to capex invested and the lengthy pre-qualification process,” Oh explains.
“Furthermore, consumer demand for electronic gadgets is inelastic. Consumers will continue to buy gadgets and they can easily switch between brands,” he says in an email to StarBizWeek.
On that note, Oh says he does not expect the rising global trade tensions to have any material impact on Mi Equipment in the short term.
“The impact (of global trade war) may be felt more immediately by commodities, raw materials or agricultural players who are directly affected by the tariffs,” he reckons.
“However, if the policies sustain for the medium term, new investments in the semiconductor industry may be geographically restructured. If that happens, Malaysia may be a beneficiary,” he points out.
Mi Equipment derives the bulk of its revenue from overseas market. For instance, last year, foreign markets accounted for 83% of its revenue, with about 64% of sales coming from Northeast Asia.