GEORGE TOWN: Companies in the country’s electronics manufacturing sector will carry out their business strategies as planned despite the movement control order (MCO).
“We are all familiar with the standard operating procedures (SOPs) to curb the spread of Covid-19, which don’t interfere with the production process.
“The requirement for only 30% of the management staff to be allowed at the office doesn’t slow down production, as the supervision and management could also be done virtually and remotely, ” Globetronics Technology Bhd chief executive officer Datuk Heng Huck Lee said.
Heng, however, said the prolonged closure of the borders was a concern because it would deter new investments from entering the country.
“Potential customers are facing difficulties in carrying new site certifications and qualifications because they cannot travel in and out of the country without having to undergo quarantine.
“We already have a customer from China delaying their project with us.
“If the borders open up soon, we plan to allocate up to RM65mil to expand our operations this year, ” he said.
According to Heng, the group’s business plans for 2021 would carry on as planned.
“We have four new projects for this year and beyond, which will boost our growth and bottom line starting from the first half, ” Heng said.
According to Heng, the group will spend about RM11mil to build a 25,000-sq-ft of factory space, equipped with a clean room facility.
“Construction of the facility will start before year-end and it will support the production of advanced smart sensors.
“We are allocating RM34mil to upgrade our design and development and the digitalisation of our sensor operation with Industry 4.0 capabilities, ” he added.
MMS Ventures Bhd managing director T.K. Sia (pic below) said the MCO would not disrupt the group’s efforts in securing new projects this year.
“We are negotiating with a China-based customer to purchase our test-equipment to check sensors in 5G smartphones.
“If successful, we could see a sale of about RM30mil worth of test-equipment to the customer in China.
“The restriction on overseas travelling, however, will check forthcoming investments, as our customers will not be able to visit us to qualify our facility here, ” Sia added.
Pentamaster Corp Bhd chairman C.B. Chuah (pic below) said international travelling restriction during the MCO period is a major issue.
“During the MCO, are the foreign embassies opened? Can we still obtain visas to travel although we are in the essential services?
“Some 80% of our customers are in the US, China, Japan, Taiwan and Europe. If we can’t travel to install the test-equipment, that could be a problem for getting new customers.
“Our order book for the first quarter of 2021 is already filled up. Barring unforeseen circumstances such as a delay in the shipment of orders, our sales for the first quarter of 2021 should improve by a double-digit percentage over the corresponding period of 2020, ” he said.
Chuah said entry-level 5G and 4G smartphones would drive demand in emerging markets.
He said a Digitimes Research Report showed that demand for these devices are expected to reach over 1.5 billion units in 2023 and 1.7 billion units in 2025.
“We expect to rebound strongly in 2021, ” he added.
According to Taiwan-based market intelligence provider Trendforce, because of the Covid-19 pandemic, the global smartphone production reached a mere 1.25 billion units in 2020, a record-breaking 11% year-on-year drop.
It said the top six smartphone brands ranked by production volume for 2020, in order, are Samsung, Apple, Huawei, Xiaomi, OPPO and Vivo. The most glaring change from the previous year is Huawei’s market share.
Looking ahead to the rest of 2021, TrendForce believes the global smartphone market will gradually recover as people become accustomed to the new normal resulting from the pandemic.
“Moreover, this year will likely see a relatively strong wave of device replacement demand as well as demand growth in the emerging markets.
“Assuming that these conditions will materialise, the annual global smartphone production for 2021 is forecast to increase by 9% to 1.36 billion units, ” Trendforce said.
Source: https://www.thestar.com.my/business/business-news/2021/01/18/business-continues-for-electronics-firms
By DAVID TAN