On June 3, Frencken announced plans to spend $63 million to develop a new facility at Kaki Bukit to consolidate its existing operating sites here for better efficiency and future expansion.
Frencken says: “The new facility will expand the group’s production resources to support existing and new programs, and strengthen its position to advance with key customers in the coming years.”
“Along with improved productivity, the development will also expand the group’s capacity, particularly for larger cleanrooms, to scale up its business portfolio with key wafer fabrication equipment customers,” the company adds.
In 1QFY2025 ended March 31, revenue was up 11.5% y-o-y to $215.8 million, while patmi was up 12% y-o-y to $10 million. The semiconductor segment was the star performer, with revenue jumping 33.7% y-o-y to $106.2 million on stronger sales to a key European customer and a strong sales rebound in Asia.
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Despite the broader concerns over the trade tensions, Frencken, careful to maintain a “cautious view”, is guiding revenue to be “moderate” in 1HFY2025 over 2HFY2024.
In its 1QFY2025 commentary, Frencken says that shipments to the US accounted for only 9% of FY2024 revenue, for which Singapore accounted for 6% of the FY2024 total.
Moreover, customers would bear import tariffs based on international commercial terms.
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Frencken is confident that it has built a certain level of resilience against economic volatility, leaning on a broad revenue base that cuts across various sectors, plus “strong partnerships” with key customers. “This core focus gives the group a distinct advantage in the current environment of escalating trade war risks,” says Frencken.
The company says it has built up capabilities across various key operating sites in Asia, Europe and the US to function in a “local for local” manner. Frencken says that, thus far, it has not witnessed any major changes to its business programmes with key customers, with which it remains closely engaged.
Venture’s Wong not losing his nerves
Venture Corp, which has a more diversified customer base ranging from health sciences to automotive to consumer to semiconductor, on May 14 reported a 7.5% y-o-y drop in 1QFY2025 ended March 31 revenue to $616.6 million, which it attributed to lower demand in the lifestyle consumer technology domain. Venture says improved reliability and longevity for a customer’s key products have reduced product replacements. Earnings per share for the quarter were down 6.8% y-o-y to 19.3 cents.
“The broad consensus among Venture’s customers is that the ongoing tariff situation has created significant uncertainty in the global economic environment, with no clear visibility in the tariff landscape over the next 12 months,” say UOB Kay Hian analysts John Cheong and Heidi Mo in their May 15 note. They have kept their “hold” call but have also reduced their target price from $13.35 to $12.01.
Long-time Venture executive chairman Wong Ngit Liong, in response to shareholders at the company’s AGM on April 24, says that its management should not “lose its nerves” in the face of the evolving tariff situation.
In the near future, the company’s priority is to work with its existing customers to navigate the challenges posed by the tariffs. In the long term, Venture will continue to focus on building new differentiating capabilities to stay relevant and impactful in the “ecosystems” it is in, according to the minutes of Venture’s AGM held on April 24.
To signal its confidence, Venture is speeding up its share buyback programme, which was introduced in November 2023 to buy back 10 million shares. The most recent was on April 16, when it paid $10.73 each for 25,000 shares, bringing the total number of shares repurchased under the current mandate to more than 2.53 million, or 0.8733% of the share base.
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UMS Integration on May 9 reported earnings of $9.8 million for 1QFY2025 ended March 31, a negligible change y-o-y, while revenue was up 7% y-o-y to $57.65 million, thanks to both its semiconductor and aerospace businesses, up 6% and 22% respectively.
In Malaysia, where it is ramping up its manufacturing volume to fulfil orders from a key customer, revenue was up 287% y-o-y to $9.4 million. US revenue grew 7%, while sales in Singapore declined 5%.
“Despite the ongoing trade war between the world’s largest superpowers weighing on global sentiment, the group’s key customers’ order forecasts have not changed,” says UMS chairman and CEO Andy Luong. “We are especially encouraged by the strong order flow from our new key customer as it seeks to divert its US supply source to Asia.”
