GEORGE TOWN: Semiconductor automated test equipment maker Pentamaster Corp Bhd is diversifying into the production of automated production systems used in the electric vehicle (EV) and logistics industries to offset the declining contribution from the smartphone segment.
Group chairman C.B. Chuah said the group had secured about RM200mil worth of orders for its products comprising semiconductor testers and integrated automated production systems for the first half of 2020.
“The contribution from the smartphone segment is about 40%, while the remainder comes from the EV, smart warehouse, and smart factory segments.
“The EV customers come from Asia-Pacific, Europe, and the United States, while the automated warehouse customers are based in the Asean region, ” he said.
Pentamaster is allocating about RM20mil as capital expenditure in 2020 for the new business.
Chuah said the contribution from the smartphone sector declined in 2019.
“We expect the contribution to be around 55% for the 2019 financial year which ended on Dec 31. The contribution used to be about 70%. For this year, we are projecting for the smartphone segment to generate about 40% to our revenue, ” he said.
According to JP Morgan’s Driving into ‘2025: The Future of Electric Vehicles’, the growth in EVs and hybrid electric vehicles (HEVs) is climbing and by 2025, they will account for an estimated 30% of all vehicle sales.
“JP Morgan predicts that the EV sales will rise by 2025 to about 8.4 million vehicles or a 7.7% market share.
“The HEV is forecast to increase from just 3% of global market share to more than 25 million vehicles or 23% of global sales over the same period.
“Our integrated automated production system is for making and testing power devices used in EVs, ” Chuah added.
According to Chuah, the Internet of things (IoT) products, and increased customisation of cars, manufacturers require easy access to growing numbers of components with very little room for material handling errors.
“Logistic companies, therefore, are now investing in sensors, scanners and RFID tags with warehouse control systems and automated material handling equipment to improve warehouse safety and operational efficiency.
“The same technology allows real-time identification and tracking of inventories that will streamline the logistics process and reduce error potential, ” Chuah added.
According to LogisticIQ, a New Delhi-based research and advisory firm, the market worth of warehouse automation will hit about US$27bil in 2025.
“The rapid growth of the fast-moving consumer goods, pharmaceutical products, and e-commerce are driving the construction of smart logistic hubs in the Asean region, where most of our customers are based.
“Our findings show that there are more than 300 million Internet users in the Asean region and e-commerce in the region is estimated to become a major industry in the coming years.
“The Asean region will see some 3.8 million new Internet users every month, making the area one of the fastest-growing internet market.
“In 2018, the Asean internet economy reached US$72bil in gross merchandise value, ” Chuah said.
In the second half of 2019, Pentamaster acquired TP Concept, a medical company involved in the manufacturing and assembly of medical machines.
“The global medical devices market was valued at US$425.5bil in 2018 and is expected to reach US$612.7bil by the end of 2025.
“With rising geriatric population, the prevalence of chronic conditions, along with growth in surgical procedures, and complex surgeries, global medical devices market shall witness steady organic growth.
“Presently this sector has predominantly been dominated by multinational companies that are 90% exported.
“The acquisition allows us to strengthen our competitive edge in the medical device industry, ” Chuah added.