Malaysian hard disk drive makers see higher demand

The industry expects single-digit percentage rise in orders this year
GEORGE
TOWN: Local hard disk drive (HDD) component producers are expecting a
single-digit percentage growth in orders this year, while test
equipment manufacturers are more bullish about their prospects.
Penang-based HDD manufacturers such as Eng Teknologi Holdings and Dufu Technology Corp Bhd are confident of a slight growth, due to the stabilised demand for HDD, and the growing popularity of hybrid drives.
Eng Teknologi chief executive officer Datuk Y.K. Teh
said in an interview that the group was now ramping up the production
of HDD components in the second quarter such as actuators and
baseplates.
“There is overall growth for the enterprise, desktop, and mobile segments worldwide.
“Prices
of HDD and the demand dropped significantly after the third quarter
2012, due to excess supply of HDD worldwide, and the changes in new
product line-up but since the beginning of 2013, the demand for HDD has
become stabilised,” he said.
Teh added that the group's production output of HDD components would grow by a single-digit percentage this year.
“We also expect our revenue to increase by about 10% from RM400mil a year ago,” he said.
Dufu chief executive officer P.Y. Yong said the group had received orders for HDD components such as spacers and clamps to be delivered in the third quarter.
“These
HDD components will be used in 5mm and 7mm HDDs found in ultrabooks. We
expect orders for 2013 to increase by a single-digit percentage this
year over 2012,” he said.
Due to the maturity of the HDD market,
Dufu would reduce the contribution of its HDD components business to
about 60% this year from 70% a year ago, according to Yong.
“We will be growing the contribution from our sensor and control device business,” he added.
Yong said over the next two years, the group expected the global demand for HDD to be flat.
According
to Trendfocus, the data storage industry specialist research house, the
global shipment of HDD is expected to contract to 565.76mil units this
year from 579.85mil units in 2012.
A recent report from IHS
iSuppli said the global HDD market revenue was expected to fall by 12%
in 2013 to US$32.7bil from US$37.1bil in 2012.
“The decline will
mainly be due to the popularity of tablets, smartphones and solid state
drives (SSD),” he said, adding that the trend would continue with
revenue falling to US$32bil in 2014.
Meanwhile, test equipment manufacturer Elsoft Research Bhd expects double-digit percentage growth in orders this first half over the previous corresponding period.
Elsoft chief executive officer C. E. Tan
said the group was producing more light-emitting diode (LED) test
equipment with integrated functions to be delivered in the second and
third quarters.
“The LED test equipment checks the uniformity of
the colours and light emitted by the LED chips used in consumer
electronic products. Our new RM12mil 90,000sq ft facility will start
operations later this year to develop new LED test equipment with more
functions.
“We will also be outsourcing more work to local SMIs,
increasing the expenditure from RM6mil in 2012 to RM8mil this year,”
Tan said.
Pentamaster Corp Bhd executive chairman C.B. Chuah said the group expected orders for its new test equipment to come in the third quarter 2013.
“The
new generation tablets and smart phones are expected to be released in
the fourth quarter this year. These devices will be using
micro-electro-mechanical sensors (MEMS), timing device chips and
light-emitting diodes that will need to be tested,” he said.
Chuah
said this second quarter was slower than the first quarter because the
new generation of tablet and smartphone were being developed. “The
second quarter is also slow because the semiconductor market has not
yet recovered, affecting the demand for semiconductor chip test
equipment,” he said.