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Electronics, chip sectors in M'sia to slow

Publication Date : 18-09-2012


The semiconductor and electronics industries in Malaysia are expected to register a single-digit drop in sales in the second half of the year compared with the first half, according to the Malaysian American Electronics Industry (MAEI).

MAEI chairman Wong Siew Hai said its members had given the feedback that the second half would register a drop in sales orders, due to the weakening economic climate in Europe.

“There are many purchasers who are waiting for the Windows 8 version to come out before placing orders for laptops. This could be another reason for the slowdown, other than the European economic crisis.

“We expect, therefore, a single-digit drop by the year-end compared with the first half of 2012,” he said.

Some MAEI members had cut down their overtime activities, Wong said.

In May 2012, the MAEI had forecast a 3 per cent increase to 58 billion ringgit (US$18.94 billion) in export sales this year from a year ago.

The areas of growth would revolve around semiconductor and components in mobile devices, ultra book, servers for cloud computing, optoelectronics and embedded technology, Wong said.

The North America-based IHS iSuppli's recent market research report published in August said that the weakening economic conditions slowed down the demand for PCs and related electronic components, prompting IHS to downgrade its forecast for 2012 global semiconductor market chip revenue.

According to the report, the global semiconductor revenue now is expected to decline slightly for the year, contracting by 0.1 per cent, marking the first annual decline for the global semiconductor industry since 2009.

The previous IHS forecast called for marginal growth of less than 3 per cent, the report said.

PCs and related peripherals were the key market segment pulling down the overall semiconductor market in 2012, the report added.

In the report, IHS senior director Dale Ford said the expected decline in 2012 represents a major event for the global semiconductor market.

“Throughout all of 2011, even though electronics markets were very weak, IHS never projected revenue to decline for the entire year.

“However, the disappointing results in the second quarter and weak third-quarter expectations driven by poor economic conditions are expected to cause the semiconductor market to retreat this year,” Ford added.

Ford said that while the new arrivals of ultrabooks and other ultrathin PC platforms in the second half of the year would boost give the PC market, the counterweight of growing economic worries would exert strong downward pressure on the overall PC market and limit both consumer and corporate spending in 2012.

The Free Industrial Zone Penang Companies' Association (FREPENCA) chairman Heng Huck Lee said the fourth quarter of this year was expected to register around a 5 per cent to 10 per cent drop in sales orders for the semiconductor and electronics industries.

“The slowdown is expected to continue to the first quarter of 2013, as it is usually a period for new product introduction and qualification.

“We may see orders returning for the second and third quarters of 2013,” he said.

Mini-Circuits Technologies (M) Sdn Bhd chairman and president Kelvin Kiew said the slowdown was seen in the storage data and computing devices segments.

“This situation has affected companies in Penang supplying to these sectors.

“We expect the slowdown to continue to the final quarter,” he said.

The Penang Freight Forwarders Association (PFFA) is forecasting a 17 per cent drop in the total tonnage of cargo to be handled this year compared with 2011.

PFFA vice-president and air freight chairman P. Kalimuthu told StarBiz that PFFA forecast for 2012 was 123,402 tonnes of cargo compared with 149,328 tonnes a year ago.

“The decline is due to the global economic crisis, affecting the demand for semiconductor and electronic products, which form about 70 per cent of the cargo handled,” he said.


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