MMS to raise production by 50% next year

“The 40% to 50% growth is just a conservative estimate. We are expecting an even better performance. MMS has so far delivered 40 units of semiconductor test equipment to the MNCs in Malaysia and Germany," group managing director T. K. Sia told StarBiz. (File pic shows Sia testing some of the equipment at the factory)

GEORGE TOWN: Semiconductor test equipment manufacturer MMS Ventures Bhd plans to expand its operations in 2022 in line with the positive outlook for the smartphone industry.

The group currently has utilised 80% of its production floor in Bayan Lepas.

“We want to raise our production capacity and capital expenditure by 50% and 30%, respectively.

“The aim of the expansion exercise is to achieve a 20% growth in sales,” group managing director T. K. Sia told StarBiz.

The group is also allocating RM15mil to either purchase or lease a facility to expand in 2022.

Currently, MMS is utilising 80% of its 12,000-square-feet production floor to manufacture 80 to 90 automated test equipment with an estimate RM45mil value annually.

According to Sia, the smartphone sector would continue to perform well until the second quarter of 2022.

“Orders in hand secured for the first quarter 2022 has touched RM15mil.

MMS Ventures factoryMMS Ventures factory

“Customers’ forecast suggest that the trend should continue into the second quarter,” he said.

MMS will close the 2021 financial year ending December with a 40% to 50% growth in sales over 2020, boosted by strong demand from multinational corporations in the country and direct exports to Germany.

The group’s revenue for the nine months of the 2021 financial year is about RM30mil compared to RM22.6mil for the whole of 2020.

“The 40% to 50% growth is just a conservative estimate. We are expecting an even better performance. MMS has so far delivered 40 units of semiconductor test equipment to the MNCs in Malaysia and Germany.

“These are MNCs involved making chips for United States-based manufacturers of smartphones, automobiles and computers,” he said.

On the global shortage of chips, Sia said the group’s inventory was well well-stocked to cover production for the next six months. “The shortage will not impact us,” he added.

The smartphone industry leads currently with a 50% contribution to MMS’s revenue, while the automotive, lighting, and original equipment manufacturing segments account for the remaining 50%.

According to the Taiwan-based research house, Trendforce, the demand from emerging markets and the usual device replacement cycle will bring sales in 2022 to 1.39 billion units, which will be a 3.8% yearly growth.

The reports added that some 660 million will be 5G-enabled which is 47.5% of all devices. “Samsung’s sales will reach 276 million devices in 2022, which is about a 1.1% year- on-year increase.

“The company has already managed to diversify the manufacturing of its mid-range and entry-level phones to make them more cost-competitive.

“However, since the company already has a massive share of the market, its increase will be slight, compared with the 2021 performance,” the report said.

Trendforce predicts that Apple will release a new iPhone SE early next year, which will have a 4.7-inch display and A15 bionic chipset. However, the report concluded that iPhone 14 will be the main driver of the sales.

According to Trendforce, the Chinese market is unlikely to grow significantly in 2022, so companies like Xiaomi, Oppo and Vivo will try to expand on the global scene.

“Xiaomi is predicted to see a 15.8% growth, reaching 220 million units.

“According to Trendforce, Oppo and its sister companies OnePlus and Realme will come just short of that number at 208 million units,” Trendforce said.

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