Electronic/Semiconductor Sector News
 

Global Chip Sales Rise 17pc in 2nd Qtr

Global semiconductor sales for the second quarter rose 17 per cent quarter-over-quarter to US$51.7 billion helped by closely managed inventories, suggesting a gradual recovery of demand, an industry association said. Worldwide sales in June were US$17.2 billion, an increase of 3.7 per cent from May, the Semiconductor Industry Association (SIA) said. “The fourth-consecutive monthly increase in sales is one indicator the industry is returning to normal seasonal growth patterns,” said SIA president George Scalise.

Industry analysts have recently become more optimistic in their forecasts for key demand drivers, such as PCs and mobile handsets, Scalise noted. Last month, bellwether Intel Corp’s quarterly results and outlook beat market expectations on better-than-expected consumer demand for PCs, especially in Asia.

(Source: New Straits Times, 4 August 2009)


E&E Demand Slows Down IPI Drop

Industrial output in Malaysia showed a slower decline in June on the back of an improved external demand for electrical and electronic (E&E) products. The Statistics Department said the Industrial Production Index decreased 9.6 per cent as compared with June 2008, and declined 11.3 per cent (revised) year-on-year drop in May 2009. The drop in June was mostly due to manufacturing (13.1 per cent) and mining (3.4 per cent) although the electricity index posted an increase of 2.5 per cent. The IPI was close to the average decline forecast by a Business Times poll (-9.30 per cent year-on-year).

Kenanga Investment Bank economist Wan Suhaimi Saidi described the numbers as in line with the regional improving trends. "Export numbers have improved and so has output, which is also due to the base effect," he said. However, he warned that there would be an occasional dip in the output numbers going forward due to inventory adjustments. Wan Suhaimi, who is holding on to a second-half growth story for Malaysia (and a -1.3 per cent growth for 2009), said the third-quarter will likely see large contractions or flattish growth before the economy enjoys a 3 to 4 per cent growth in the fourth quarter. This is mostly due to the fiscal and monetary policies which Malaysia has introduced to mitigate the effects of the global crisis.

The Statistics Department also said that the IPI also posted a marginal increase month-on-month by 0.2 per cent. For the first half of this year, the IPI declined 12.7 per cent year-on-year, with the manufacturing index lower by 16.9 per cent compared to a year ago. The contraction of the manufacturing output was due to decreases in electrical and electronics products (27.5 per cent), non-metallic mineral products, basic metal and fabricated metal products (12.8 per cent); and petroleum, chemical, rubber and plastic products (4.6 per cent). The mining sector, which also saw a drop in output, was affected by the decrease in natural gas (8.7 per cent) and crude oil (1.2 per cent) indices.

(Source: New Straits Times, 11 August 2009)


Electronics Charge

The improvement in orders seen in the electronics sector in Penang in the second quarter is expected to expand into the third and fourth quarters. This is a departure from four months ago when the state’s electronics companies had been mixed in their forecasts for the second half outlook when they were interviewed. The increased orders seen in the second quarter came largely from South Korea, Japan, the US, and European multinational corporations (MNCs). This trend is expected to improve in the third and fourth quarters, as distributors and wholesalers are now stocking up to prepare for the festive season sales in the fourth quarter, according to industry players.

P.I.E. Industrial Bhd managing director Alvin Mui said the third and fourth quarters were traditionally the best quarters of the year. “We anticipate that demand will continue to increase for the rest of the year, although it will not be able to match the result of last year’s corresponding period,” he said. For the second quarter, P.I.E. Industrial posted RM8.5mil in pretax profit on the back of RM52mil in revenue, compared to RM6.9mil and RM46mil achieved respectively in the first quarter. “The increase in demand is due to the higher orders from most of our existing customers in the US and Europe,” Mui said. “The electronic manufacturing services business has become more competitive during this economic downturn.”

Eng Teknologi Holdings Bhd chief executive officer Datuk Y.K. Teh said the global demand for hard disk drives was expected to grow by about 6.6% to 140 million units in the third quarter compared to the second quarter, according to US-based research firm TrendFocus. “In the fourth quarter, the global demand is expected to increase by 3.8% to 145 million units over the third quarter,” he said. “The group is spending RM15mil to expand its hard disk drive operations in the country and overseas this year.”

GUH Holdings Bhd managing director Datuk Kenneth H’ng said the company’s month-to-month sales for the third quarter so far were as good as the corresponding period last year, just before the crisis started in October 2008. “For such challenging economic times, we are not disappointed at all,” he said. “In fact, due to the growth in the second quarter, we are going to spend RM15mil to expand the production capacity of our plants in Penang and Suzhou for the second half of 2009.” In the second quarter, the group posted RM20mil in pretax profit on the back of RM74mil in revenue, compared to RM4.7mil in pretax profit and RM53mil in revenue achieved in the first quarter of 2009. For the first six months of 2009, the group generated RM25mil in pretax profit on the back of RM127mil in revenue, compared to RM2mil in pretax profit and RM133mil in revenue a year earlier. “The orders for our printed circuit boards (PCBs) products in the second quarter, secured by the group’s operations in Suzhou, came largely from Korean and Japanese MNCs operating in China,” H’ng noted.

Globetronics Technology Bhd chief financial officer Ng Kok Choon said the group’s business for the third quarter was expected to improve compared to the second quarter.
“We have increased monthly production by 10% to about 30 million units of integrated circuits and light emitting diode dies for the third quarter,” he said. “The group also expects to receive more orders from customers in Japan, the US and China.” Ng said Globetronics’ overseas sales “should comprise about 35% of the group’s revenue for 2009, representing a 10% to 15% increase from last year’s overseas contribution” with the MNCs and local factories in the country contributing the remainder. For the second quarter ended June 30, Globetronics’ sales revenue improved by 38% to RM52mil from RM38mil, while its profit after tax improved 18-fold from RM200,000 to RM3.6mil. “The improvement has to do with the customers’ replenishment programme to stock up the inventory,” he said.


(Source: The Star, 19 August 2009)


Global Semiconductor Sales Up 5.3pc in July Month-on-month

Global semiconductor sales rose 5.3 per cent in July sequentially, reflecting a pick up in demand for products such as netbooks and cell phones, according to the Semiconductor Industry Association (SIA). SIA said worldwide sales of semiconductors were US$18.2 billion in July, up from US$17.2 billion sales recorded in June. However, chip sales in July were 18.2 per cent lower than the same period a year ago. "The fifth-consecutive month of sequential increases in semiconductor sales reflects improving demand in the consumer sector," SIA president George Scalise said in a statement.

"Purchases of information technology products by the enterprise sector continue to be tempered by caution and longer replacement cycles. There is also evidence of a return to seasonal industry patterns," Scalise said. The weak global economy has heavily affected the semiconductor industry over the last one year and chipmakers have been aggressively cutting costs and reducing workforce to stay afloat.

(Source: New Straits Times, 1 September 2009)


Semiconductor Recovery

The semiconductor sector looks set for a sustainable recovery on the back of the stabilising US economy as well as further growth in China supported by its large fiscal stimulus. Last month, the Semiconductor Industry Association reported that worldwide sales of semiconductors in July rose 5.3% to US$18.2bil compared with June’s US$17.2bil. The association noted that the year-on-year rate of decline had moderated as the year progressed. For the first half year, an average monthly year-on-year decline was 25%, while July’s sales were 18.2% lower than the corresponding month in 2008. The fifth consecutive month of sequential increases in semiconductor sales reflected the improving demand in the consumer sector, it added.

TA Securities believes global chip sales would meet the association’s forecast of US$195.6bil as the sales year-to-date have reached US$111.7bil. “There is also a big possibility that chip sales will surpass the association’s estimates given the stronger second-half year expected on the back of a more sanguine economic outlook,” it said. The stimulus plan implemented by the China government, coupled with the launch of third-generation technology, would be the catalyst for higher earnings. “The current pick-up in global chip sales is due to a combination of inventory replenishment as well as the preparation for demand uptick in the second half due to more optimistic worldwide GDP (gross domestic product) growth estimates,” TA said.

An analyst of a bank-backed brokerage said the first quarter was “probably one of the worst quarters in memory,” following which, there had been some inventory re-stocking and gradual recuperation in consumer demand, which boded well for the sector and signalled that the recovery was on track. “China has been picking up the slack from the slower US and European markets but we would need to see more signs of a worldwide recovery to truly call the sector back into health,” he said, adding that there were views of a double dip materialising in the fourth quarter while 2010 outlook remained uncertain.

Unisem (M) Bhd chairman and group managing director John Chia Sin Tet said there had been significant recovery in the industry since the second quarter and the second-half year were likely to be substantially better than the first six months. “The outlook of the semiconductor sector appears encouraging and recovery sustainable in view of the recovery of the US economy and further growth of China due to the large and direct stimulus programme being implemented,” he told StarBiz in an e-mail reply.

The analyst, meanwhile, said prospects of semiconductor companies like Unisem and Malaysian Pacific Industries Bhd were mainly tied to the health of the global economy, which was “perking up and returning to more seasonal patterns.” “The worst is behind us and quarterly earnings should continue to improve as the year progresses and moving into 2010,” he added.

(Source: The Star, 14 September 2009)
 

Quality Research will Draw US Chip Firms, Says Industry Head

Malaysia requires an investment policy that encourages provision for quality research to attract more US semiconductor companies, says the US Semiconductor Industry Association (SIA) president George Scalise. "The investment policy that was so successful in the early 70s and 80s were relevant but no longer adequate," he said. He said today one needs to bring in broader capability to the world semiconductor industry. Scalise was speaking in a dialogue session with 40 participants from the various semiconductor industries and associations and government agencies yesterday at the Malaysian Industrial Development Authority. He also suggested for more attractive tax laws as well as a social policy which is synergistic and that includes a good programme to develop the bright young ones to be interested in science and mathematics.

Dell, HP, AMD, Intel, Motorola, Western Digital were some of the US tech bellwethers which invested in Malaysia for decades. The SIA, the leading voice for the US microchip industry, has also revised its annual forecast for 2009 upwards to a slower decline of 18 per cent, says Scalise, from a decline of 21.3 per cent earlier. Scalise expects the next three to six months to register some improvement although he warned to look out for surprises in the economy such as the subprime mortgage issue which surfaced in the US market. Scalise also said that recovery within the industry was more likely to be quicker this time round unlike the previous two corrections.

The semiconductor industry is US second-largest exporting industry and today, consumer electronics drives more than 50 per cent of its demand, led by cellphones and personal computers. Drawing from the 50 years of US experience in producing research universities, Scalise stressed the need for governments to fund research. While electronic design automation (EDA) and workstations can be bought, he said, the challenge in the semiconductor industry rests on the best talent pool and best research being done and best trained engineers. The semiconductor industry globally is interdependent on the various markets. As such, it is important to have two-way flow of foreign direct investments to enhance competitiveness. For instance, Malaysia could look to the US to source for the best research, he said.

(Source: New Straits Times, 29 September 2009)


Economic News
 

World may Witness W-Shaped Recovery

Nobel prize-winning economist Paul Krugman says a double-dip in the global economy, or a second leg to the downturn, is a "real possibility", meaning that the world may go through a W-shaped recovery. "That's a real possibility. Some of the support measures, especially fiscal stimulus, will reach their peak later this year, and then recede," Krugman told Business Times in an e-mail interview. "If weak labour markets continue to act as a drag, a W-shaped recovery is quite possible." A professor at Princeton University and a New York Times Op-Ed page columnist, Krugman won the Nobel economics prize last year for his works in trade patterns.

A double-dip recession happens when gross domestic product (GDP) growth slides back to negative after a quarter or two of positive growth. Krugman said he does not foresee a sharp rise in global inflation, even as governments worldwide are pumping in hundreds of billion dollars to counter the impact of the worst global recession in decades. "No, just no. The stimulus plans may look large by historical standards, but they're not enough to close the output gap, so they are not inflationary," he said. "Monetary tightening won't happen, I hope, until the gap starts to close, which probably is at least a year away." The output gap is the difference between potential GDP and the actual growth in the economy. Many expected the world economy to grow at a rate below its potential in the next couple of years in a slow recovery.

Krugman will be speaking at the World Capital Markets Symposium in Kuala Lumpur next week. He will also join a panel discussion on reshaping the world economy at the same conference on Monday. He believes that the emerging economies of Brazil, Russia, India and China, commonly known by the acronym BRIC, will "probably" overtake the Group of Seven in terms of output. But this will not happen anytime soon. "They have a lot more people, and productivity is converging (with the advanced economies)," Krugman remarked. "But I think we're 20 or more years from the point where China overtakes the US, and more before the emerging markets surpass the West as a whole." A new international reserve currency may also emerge "someday" to supplant the US dollar, but "not soon".

(Source: New Straits Times, 6 August 2009)


Member News
 

Pewter Fun for NSTP Staff and Children

Squeals of laughter filled the air as the children of staff of the New Straits Times Press (NSTP) created their pewter masterpieces at the Royal Selangor Pewter visitors’ centre on Saturday. About 50 children, aged 6 and above, deftly handled hammers and mallets as they were guided through the process of forming, scrapping, polishing and packing their own pewter dish as part of the NSTP’s monthly edutainment programme. “The hammer was a little heavy but I had fun making a pewter dish and spending time with my mum,” said Iman Soraya, 6. The children also toured the centre to learn about the science of pewter and had a chance to watch pewtersmiths at work.

NSTP chief executive officer Datuk Anthony Bujang said the objective of such edutainment activities was to foster a closer relationship between employees and their children. “Once a month, we can spare parents the headache of finding a fun and educational activity that they can enjoy together with their children.” He spent the day with his children, Mark Hisham Anthony, 14, Elyza Jasmine Anthony, 9, and Adam Malique Anthony, 8.

(Source: New Straits Times, 27 July 2009)


Giant Tankard to go on a Tour

The world’s largest tankard has been found safely on display at the Pavilion. It was reported to have mysteriously disappeared from its “home” at the Royal Selangor Visitor Centre in Setapak on July 24. As part of its marketing campaign to highlight the visitor centre’s fifth anniversary, the giant tankard will be going on a roadshow at several high traffic locations in the Klang Valley and Penang. The company revealed that to promote the roadshow, Naga DDB and Tribal DDB were appointed as the creative agencies to execute a marketing campaign to create interest and discussion on the social media network. Use of new media had been selected due to its popularity among young and Internet-savvy adults.

Royal Selangor’s giant tankard begins its roadshow at the Pavilion Kuala Lumpur on Monday. On Aug 18, it will move to The Curve where it will be exhibited at the Piazza. The tankard will travel north and will be exhibited at Gurney Plaza from Sept 2 to 14 before it returns to the Royal Selangor Visitor Centre. To further engage the public, Royal Selangor is also running the ‘Take a Giant Mug Shot’ photography contest where visitors are given the opportunity to showcase their creativity by producing a memorable photograph with the tankard. Winners will stand a chance to win a Olympus PEN Camera, Royal Selangor tankards and School of Hard Knock pewtersmithing workshop vouchers. The contest ends on Sept 30. Further details can be obtained at www.giantmugshots.royalselangor.com.

Measuring 1.987m, and weighing 1,557kg, the tankard, certified as the world’s largest by the Guinness World Records, is a key attraction of the centre. Made in 1985 to celebrate the company’s centenary, the tankard is a popular photo backdrop for many tourists visiting this award-winning tourist destination. In addition to the giant tankard, visitors to Royal Selangor Visitor Centre can also enjoy complimentary guided tours, visit the spacious retail store as well as unwind at its newly-opened café. Those who seek a hands-on experience may take part in the School of Hard Knocks pewter-smithing workshop for a nomimal fee. For further information, call 03- 4145 6122.

(Source: The Star, 31 July 2009)


Stylish Gifts For All

Make Hari Raya more memorable with classic and elegant gifts from Royal Selangor’s Raya package options – Aidilfitri, Syawal, Salam, Syukur and Mubarak. Whether it is food or decorative items, everything has to look beautiful and captivating during the Hari Raya festive season. Aidilfitri, the Classic Expressions pewter bowl packaged with premium dates, is best to create a lasting impression when serving kuih-muih and cookies to friends and relatives.

To welcome the month of Syawal, Royal Selangor offers the Syawal gift set. A perfect balik kampung gift, Syawal presents an Isthmus pewter tray beautifully packed with pistachios in an impressive gift box to delight the hearts of special people in your life. In addition, you can also impress your guests by serving kuih Raya with the Isthmus tray. Greet friends and family with Salam – a pair of foliage motif pewter tumblers from Royal Selangor’s Isthmus collection presented in a glossy box with a walnut finish. Apart from maintaining the coolness of refrigerated drinks, Salam provides a truly “thirst-quenching” experience during rumah terbuka or open house sessions. Comprising a pair of cembul, Syukur is sure to keep your betel nut, kapur, gambir, or even betel leaves fresh. For a bigger storage of festive bits, the Mubarak gift set is another excellent choice. It is packed with cashew nuts in a glossy walnut finish gift box that makes Mubarak a perfect gift when visiting relatives and friends. Check out this inspiring range of gifts to celebrate Hari Raya with family, friends and loved ones at the nearest Royal Selangor retail store or authorised dealer. Price start from RM250.

(Source: The Star, 4 September 2009)


What a Knock-out!

I’m walking into my pounding head. Well, maybe not literally, though it sounds like an interesting thing to do so... What I have done, however, is to enrol myself in the School Of Hard Knocks. “Eh, what’s that?”, I hear you say. I am feeling rather puzzled myself until I set foot in the school, or rather the classroom at the Royal Selangor visitor centre in Setapak, Selangor. I stand outside for a few minutes, watching a group of women trying to impress the school guide watching over them. Imagine being in a room with 20 people who, for the first time, are trying to learn to be a drummer. The noise from the effort echoes in my head but I have to join in the fray. I ditch my handbag and umbrella in favour of a navy blue apron emblazoned with the words, Royal Selangor School Of Hard Knocks, in white right across the chest.

Hard Knocks Of Life
The phrase, school of hard knocks, means “the lessons one learns from usually painful, negative experiences in life”. But there is nothing negative about the Royal Selangor School Of Hard Knocks though it can be rather painful on the ears and head for many people. Anyway, if you can’t beat them, join them... and I do, with gusto. Surprisingly, my headache seems to subside in proportion to the amount of fun the session turns out to be. I must add, at this point, that the class is all about the tradition of pewter-smithing, so all the tools that we use are what Yong Koon, the founder of Royal Selangor, used in the late 1800s. I am given a flat piece of pewter and told to mould it into a small bowl. First, I am to etch my initials in the middle, so placing the stamp with my initials there with one hand and a hammer in the other, I whack at it once, just once. I remove the stamp and there it is, LD!

Banging Away
Let the fun begin. I am standing at a table, in front of an oblong block of wood with a depression in the centre. This is where I am to hammer the sides of the pewter piece and turn it into a bowl. Perhaps anger-management therapists may want to consider bringing their patients here because nothing feels so good as imagining the piece of pewter to be the head of the person you don’t like and hammering away to get it into shape. It is rather soothing to work in a systematic manner, beginning from the middle to the edge, again and again. I work the pewter over and over until the guide hovering over me is satisfied. I breathe a sigh of relief. Done at last? No, not yet. The guide turns over the wooden block to reveal a smaller indentation on the flipside and tells me to continue banging away at the bowl till it’s perfect. So I take a deep breath and brandish the hammer menacingly. The feel-good mood is dissipating as my arms begin to hurt from so much work. But despite the aching arms, I continue to work the piece clockwise from inside out for 20 more minutes, stopping every now and then to give my hand a good shake.

Worth The Pain
The kids in my class have finished and are washing their bowls in the final step. They break into proud smiles as they are presented with “graduation” certificates. Then comes my turn to receive my certificate and a bag holding my very own pewter masterpiece. I won’t say it hasn’t been a painful process but the feeling of achievement is worth every ache.

Where To Enrol
Those who want a piece of the pewter-smithing action (RM50) can visit the Royal Selangor Pewter visitor centre in Setapak anytime between 9am and 5pm daily. For large groups, it’s best to call 03-4145 6122 first to book yourselves a place in the School Of Hard Knocks.

(Source: New Straits Times, 8 September 2009)