Electronics, chip sectors to slow

Single-digit drop in sales expected in the second half on European woes
GEORGE
TOWN: The semiconductor and electronics industries in the country 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 Datuk 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.

[You must be registered and logged in to see this image.] Wong: ‘There are many purchasers who are waiting for the Windows 8 version to come out before placing orders for laptops.’ Some MAEI members had cut down their overtime activities, Wong said.
In May 2012, the MAEI had forecast a 3% increase to RM58bil 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%, marking the first annual decline for the global semiconductor
industry since 2009.
The previous IHS forecast called for marginal growth of less than 3%, 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% to 10% 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 Datuk Seri 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% 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, affectinjg the demand for
semiconductor and electronic products, which form about 70% of the
cargo handled,” he said.