We don’t rely on Apple sales alone — Unisem

by **Cals** Sat 30 Apr 2016, 03:00

We don’t rely on Apple sales alone — Unisem

By Tan Siew Mung / The Edge Financial Daily | April 29, 2016 : 10:35 AM MYT

This article first appeared in The Edge Financial Daily, on April 29, 2016.

KUALA LUMPUR: Unisem (M) Bhd said although Apple is an important end customer for the group, its business is diversified enough to mitigate potential earnings risk from a single client.

The chipmaker’s chairman and group managing director, John Chia Sin Tet, said the group has a wide range of customers across many segments including telecommunications, personal computer, automotive, consumer appliance and lighting, and industrial products.

“We are not relying on a single business or a single client. The lower sales to a client are expected to be mitigated by growth of another client. Thus, I am confident that our business will not fall off the cliff, like what our peers are experiencing now,” Chia told reporters after Unisem’s annual general meeting.

He was asked about Apple’s announcement on Tuesday that iPhone sales had dropped for the first time, slipping to 51.19 million in the recently ended quarter compared with 61.17 million a year ago.

Chia said the telecommunications sector accounts for 30% to 40% of Unisem’s revenue, half of which comes from Apple products.

The group’s other customers include Samsung, Huawei, Lenova and Xiaomi.

Chia thinks Apple will do something to improve its business, and when a new model is launched in the second half of the year, it will keep industry players busy again.

Contrary to the views of market observers and peers, Chia is expecting a better year for Unisem.

“We are optimistic that this year will be a better year. Based on current statistics, the industry remains robust for quarters ahead,” he said.

The group’s net profit jumped 47.4% to RM34.7 million for the first quarter ended March 31 (1QFY16), from RM23.54 million in the previous corresponding quarter, supported by higher revenue and improved margins due to better contributions from its wafer bumping and advanced package operations. Revenue grew 13.5% to RM317.81 million from RM280.06 million in 1QFY15.

“We are still expecting an improvement in our revenue for the second quarter,” said Chia.