Globetronics’ record investment of RM85mil for producing new smart sensors

GEORGE TOWN: Globetronics Technology Bhd plans a record investment of about RM85mil this year for the mass production of new smart sensors.

Group chief executive officer Datuk Heng Huck Lee told StarBiz that the group had invested RM65mil since January for the production of two new sensors for smart telecommunication devices.

“The mass production will start next month for US customers. We expect to ship out record volumes of the new sensors on a monthly basis,” he said.

In the third quarter, Heng said Globetronics planned another investment of RM15mil to RM20mil to mass produce two new sensors for the smart healthcare wearable device and automotive lighting sectors.

“The sensors are for the smart healthcare wearable device that checks the condition of diabetic patients. The other sensor is used in automotive lighting.

“The prototypes will be ready in the third quarter 2017, while the mass production is expected to start in November of December 2017,” he added.

These new sensors, Heng said, would enable smart devices to deliver better display images and enhance its security features.

“The sensors will help the company achieve a double-digit percentage growth in its 2017 financial performance,” he said.

Heng said Globetronics had also recently recruited some 200 new workers comprising engineers, managers, and technicians.

According to Heng, the group is using internal funds for the investments in 2017.

“We are still committed to allocating 70% to 80% of our 2017 income for dividend payment.

“We are also maximising our available cash reserve for investment this year, and strive to maintain a near zero gearing status for the group,” he added.

The group had paid a 23 sen per share dividend to shareholders in 2016.

“Based on our customers’ forecast for 2018, we can expect next year to be an even more exciting year than 2017,” Heng said.

According to a recent AllianceDBS Research report, the earnings visibility of Globetronics has improved, with clearer signs supporting the strong earnings recovery in the 2017 financial year from new sensor products.

“This is also underpinned by the acquisition of Heptagon (Globetronics’ sensor customer headquartered in Singapore) by AMS AG, where details revealed by AMS are pointing towards substantial revenue growth for Heptagon starting mid-2017,” it added.

Meanwhile, Connecticut-based Gartner research firm forecasts worldwide semiconductor revenue to grow by 7.2% to US$364.1bil in 2017.

This represents a complete turnaround for the semiconductor industry as the market experienced 1.5% growth in 2016.

“The worst is now over with a positive outlook emerging for 2017, driven by inventory replenishment and increasing average selling prices in select markets, particularly commodity memory and application-specific standard products.

“The turnaround that started at the end of the second quarter of 2016 will continue to gain momentum and we expect the improved conditions to carry through 2017,” said Gartner research vice-president Ganesh Ramamoorthy.