MMS will increase production by 50% next year

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

The group has currently used 80% of its production plant in Bayan Lepas.

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

“The goal of the expansion exercise is to achieve 20% sales growth,” TK Sia Group Managing Director told StarBiz.

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

Currently, MMS uses 80% of its 12,000 square foot production facility to manufacture 80 to 90 automated test equipment with an estimated value of RM 45 million per year.

According to Sia, the smartphone industry will continue to perform well until the second quarter of 2022.

“Secure on-hand orders for the first quarter of 2022 reached RM15 million.

MMS Ventures factoryMMS Ventures factory

“Customer forecasts suggest that the trend is likely to continue in the second quarter,” he said.

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

Group revenue for the nine months of fiscal 2021 is approximately RM30 million compared to RM22.6 million for 2020 as a whole.

“The 40-50% growth is only a conservative estimate. Even better performance is expected. MMS has so far delivered 40 units of semiconductor test equipment to multinationals in Malaysia and Germany.

“These are multinationals involved in manufacturing chips for US-based smartphone, auto and computer makers,” he said.

Regarding the global crisps shortage, Sia said the group’s stocks are well stocked to cover production for the next six months. “The shortage will not affect us,” he added.

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

According to Taiwanese research firm Trendforce, demand from emerging markets and the usual cycle of device replacement will push sales in 2022 to 1.39 billion units, representing annual growth of 3.8%.

Reports add that some 660 million will be 5G compatible, or 47.5% of all devices. “Samsung’s sales will reach 276 million devices in 2022, which represents an increase of about 1.1% year-over-year.

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

“However, given that the company already has a massive market share, its increase will be slight from 2021 performance,” the report said.

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

According to Trendforce, the Chinese market is unlikely to experience significant growth in 2022, so companies like Xiaomi, Oppo and Vivo will try to expand on the global stage.

“Xiaomi is expected to experience growth of 15.8%, reaching 220 million units.

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

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