Elsoft Research to ship out test equipment

An Elsoft Research employee using an LED tester to check the brightness of LED modules

GEORGE TOWN: Elsoft Research Bhd will ship out semiconductor test equipment worth over RM20mil over the next six to nine months.

Group chief executive officer CE Tan told StarBiz that the orders started to come in during the second quarter.

“The equipment, priced between US$50,000 (RM211,500) and over US$200,000 (RM846,000), are for use in the smart devices, automotive and general lighting industries.

“The smart device segment will generate about 50% of the group’s 2021 revenue.”

“The automotive and general lighting industries are expected to generate 30% and 20% respectively,” Tan said.

Group chief executive officer CE Tan told StarBiz that the orders started to come in during the second quarter.

Elsoft’s customer base is made up of leading corporations and multinational companies in the semi-conductor and optoelectronics industries.

In 2019 and 2020, the group’s business experienced a sharp contraction because its key customers had over ordered in 2018.

“Our revenue and profit dipped sharply in 2019 and 2020,” he added.

The prospects of the semiconductor test equipment looks good, according to Tan.

According to Tan, the automotive lighting market is expected to play an important role in driving the group’s growth.

“Our test equipment are used to perform stress test on LED sensors.

“According to Future Market Insights (FMI), the overall automotive lighting market is expected to grow at a 6.3% compounded annual growth rate CAGR of for 2021- 2031.

“The automotive lighting market is expected to reach a valuation of US$34.7bil (RM147bil) in 2021,” Tan said.

The FMI report says the global sales of automotive lighting are anticipated to surpass 1.8 billion units in 2021.

Tan said semiconductor manufacturers were expected to spend more money on test equipment in the near future.

“The United States recently approved a bill that includes a US$52bil (RM220bil) budget to fund semiconductor research, design, and manufacturing.

“The Japan Ministry of Economy, Trade and Industry earlier this month announced a ‘national project’ to support semiconductor manufacturing in Japan.

“South Korea announced in May a plan to spend US$450bil (RM1.9 trillion) over the next ten years on non-memory semiconductor manufacturing paid for by private business and government tax credits.

“The European Union in May announced it is ready to commit ‘significant’ funds to expand semiconductor manufacturing in Europe.

“These commitments will translate into more spending for test equipment,” he said.

According to a recent Semiconductor Intelligence report, the Taiwan Semiconductor Manufacturing Company plans to increase its semiconductor capital spending to US$30bil (RM127bil) in 2021 from US$12.8bil (RM54bil) in 2020.

“Intel has stated it will increase spending from US$14.3bil (RM60.5bil) in 2020 to US$19.5bil (RM82.5bil) in 2021, up 37%.

“The 2021 projections were mostly made in April after first quarter earnings release.

“Many of these numbers will likely be revised upward over the course of 2021,” the report said.

Tan said for the 2022 financial year, Elsoft would focus on research and development activities for new automated test equipment used in the automotive industry and introduce new LED test solutions for smart devices.