Robust demand for chips

Globetronics gets unprecedented growth in product orders, expects sterling first quarter

GEORGE TOWN: Electrical and electronics firm Globetronics Technology Bhd is experiencing unprecedented growth in the volume of orders that will translate into a record-breaking first quarter ending March 31, 2018 – traditionally a weak quarter for the electronics and semiconductor industries.

Group chief executive officer Datuk Heng Huck Lee told StarBiz that the company would be seeing growth for all its three segments: the sensor, LED and timing device business divisions.

“This will be the best first quarter for us since 2000, as we have already received confirmed forecast for our products in the three segments from our US, European, Japanese and Asian customers.

“Together with these confirmed forecast and demand requirements from our customers, we are confident that the performance of the first quarter will reach new heights.

“The confirmed forecast prompted us to order all the raw materials to support production for products to be delivered in the first quarter,” he said.

In the first quarter of 2017, the company posted net profit of RM4.6mil on the back of RM49.8mil in turnover.

“We can project conservatively the volume of orders to grow several folds in the first quarter, compared with the same period of 2017,” Heng added.

According to Heng, the company will finalise the capital expenditure for this year within the next couple of weeks.

“So far, we have secured three projects for 2018 and are negotiating for two more, of which one is a new business venture that will make high brightness laser headlamps for the automotive industry, while the other is a new semiconductor project from a multinational company,” he said.

The company also expected the financial year ended Dec 31, 2017 (FY17) to surpass that of FY16, boosted by the strong sales of sensors to the smart device sector.

The sensor business generated about 60% of the company’s revenue, while the LED segment contributed over 10%, with the remainder generated from the timing device and computing component business divisions.

Going forward, Heng said the smart device sector would comprise the bulk of the orders for the sensors.

“According to a Digitimes Research report published in November 2017, the global smartphone shipments are expected to grow 5% on year to reach 1.43 billion units in 2017 and expand 4.8% more to over 1.5 billion units in 2018.

“There are more than 13 sensors used in smartphones, which does not include the current sensors used for facial recognition and the next-generation sensors now being manufactured for upcoming smartphone models,” he added.

The Digitimes Research report said replacement demand for smartphones from feature phone users in emerging markets in South-East Asia, South America and Africa would be the main source of sales growth for smartphones from 2018 to 2022, with shipments to grow at a rate of 60 million to 70 million units a year during the projected period.

“With the exception of Apple and HMD Global (Nokia), the rest of the world’s top-20 handset brands in 2017 will come from Asia, including 11 from China and two each from South Korea, India and Taiwan. China-based Huawei, Oppo and Vivo will take the third, fourth and fifth positions in the global vendors ranking in 2017,” the Digitimes Research report noted.

According to a Gartner report in October 2017, worldwide shipments of PCs, tablets and smartphones are predicted to exceed 2.35 billion units in 2018, an increase of 2% from 2017, registering the highest year-on-year (y-o-y) growth since 2015.

“Mobile phone sales are expected to return to y-o-y growth in 2018, with shipments totalling 1.9 billion units. Smartphones will represent 86% of total mobile phone shipments in 2018, up 6% from 2017,” the Gartner report added.

The confirmed forecast prompted us to order all the raw materials to support production for products to be delivered in the first quarter. Datuk Heng Huck Lee