The surge in semiconductor investments in the city state is driving sustained demand for precision-engineered components such as equipment frames, racks, enclosures and metal assemblies — Wentel’s core offerings, he tells The Edge in an interview.
“The Singapore fab capex wave means a lot of semiconductor fabrication plants are being built,” Chuah says. “When our customers receive orders, they turn to us for the critical metal components. That’s our entry point into the supply chain.”
He emphasises that these developments offer strong demand visibility and higher-margin opportunities. “Rising demand for precision-engineered semiconductor equipment components allows us to move toward higher-value contracts.”
Chuah cites the examples of United Microelectronics Corp, which is constructing a new fabrication plant, with phase one production slated for 2026, and Micron Technology, which is building a $9.5 billion (RM31 billion) high-bandwidth memory advanced packaging facility. In addition, GlobalFoundries is expanding its 300mm wafer capacity through a $4 billion investment in Singapore.
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ACE-Market-listed Wentel’s customers include original equipment manufacturers and contract manufacturers in both front- and back-end segments of the semiconductor supply chain, which currently accounts for about 20% of its business.
The company’s core business is the supply of metal components and assemblies for security scanning machines, which contributes 65% of its revenue currently. Its two major clients — one is listed in the US and the other in the UK — have global distribution. Additionally, Wentel provides metal fabrication services to computer numerical control machine manufacturers (12%) and medical device producers (2%).
Chuah believes the semiconductor equipment segment can grow to match the scale of its dominant security screening equipment business within the next three years, driven by industry tailwinds and Wentel’s proven ability to meet stringent audit requirements.
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RM110 million to double capacity
To support its growth ambitions, Wentel has committed RM110 million ($33.7 million) for a new 215,000 sq ft facility in Kempas, Johor, to double the company’s production capacity and provide readily available space to accommodate immediate demand from future clients.
Once fully operational, it will serve as the company’s primary manufacturing hub, with the existing plant set to be phased out.
Scheduled for completion in the first half of next year, the facility features Industry 4.0 technologies, automation and smart manufacturing systems tailored to Wentel’s high-mix, low-volume production model.
“The new plant will allow us to grow revenue by 20% to 30% annually. In three to five years, once fully utilised, it will double our current output,” says Chuah, adding that machinery investments will be rolled out in phases.
Initially, part of the security scanning fabrication work will be relocated to the new plant, helping to alleviate space constraints at the existing facility, which is currently operating at full capacity.
He emphasises that the new site will primarily serve existing customers. “We are not chasing untested clients. Our current customers already share the same processes we have refined over the past 20 years,” he says, adding that audit approvals have already been secured.
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The site also has a hostel to support talent retention. Newer machines will reduce material wastage while automation will cover multiple stages, including the use of automatic mobile vehicles to streamline material flow. Real-time digital monitoring will further enhance operational visibility. “This plant is designed from the ground up to be smarter and more efficient,” Chuah says.
Executive director Freddy Wong highlights that Wentel has grown from just 20 employees in 2002 to a current workforce of 380. The new plant is expected to generate an additional 150 jobs.
“We aim to move up the value chain by engaging more deeply in product development,” Wong says. Despite higher depreciation from new machinery, he remains confident that revenue growth will offset costs by 2026.
Freddy is the son of the major shareholder Wong Kim Fatt who holds a 54.23% stake. Meanwhile, Kim Fatt’s brother Ban Kim Wah holds a 13.25% stake.
Security segment a reliable anchor
While the semiconductor segment offers promising growth potential, Wentel’s security division continues to deliver stable revenue, supported by evolving regulatory requirements.
Wong notes that demand for large cargo scanning machines — used at ports, airports and borders — remains strong amid rising geopolitical tensions and regulatory upgrades.
“With cross-border uncertainties, we’re seeing higher order rates for scanning machines,” he says. “The larger, more complex models are more profitable due to their engineering depth.”
Wentel also benefits from global supply chain diversification trends, particularly the “China+1” strategy. “Products shifting out of China are being transferred to Malaysia and some customers are now working with us on project relocations,” Chuah says.
Wong highlights that Wentel’s strength lies in its integrated in-house processes, which cover about 95% of production steps. This enables greater flexibility, shorter lead times and tighter quality control. He believes this creates higher barriers to entry for its competitors while positioning the group as a one-stop solution provider.
Another advantage is the linearity of Wentel’s production model. “If we lose one or two major customers, we are not worried,” Wong says. “Since all our customers share the same raw materials, if one slows down, we can shift our capacity to another.”
Wentel’s New Product Introduction (NPI) pipeline also serves as a key growth driver. Wong notes that since 2018, the company has developed over 2,000 parts, with 1,600 already approved by customers.
Before launching a new mass production, Wentel’s customers will conduct design for manufacturing tests, pre-production runs and production validation to ensure quality, cost and delivery targets are met, and to confirm that all necessary specifications and regulatory requirements are fulfilled before launch.
“It starts with just a few pieces for approval,” Wong explains. “Once approved, we are listed in the customer’s system. The more NPIs we complete, the greater our chances of entering batch production.”
Chuah adds that Wentel has evolved from a traditional fabricator since its founding in 2000 into a value-added engineering partner. “We don’t just fabricate based on drawings. We engage in customers’ R&D (research & development) from the start, helping optimise design and cost.”
Steady growth with strong balance sheet
Wentel floated its shares on the ACE Market in February last year at an initial public offering price of 26 sen. Based on Sept 25’s closing of 35.5 sen, its market capitalisation stands at RM408 million.
For the financial year ended Dec 31, 2024 (FY2024), the group recorded an audited net profit of RM15.03 million, or one sen per share, on revenue of RM112.42 million.
In the first half of FY2025, net profit grew 22.6% to RM11.14 million or 0.97 sen, compared with pro forma earnings of RM9.09 million in 1HFY2024 after adjusting for one-off listing expenses. Its revenue increased 21% year on year to RM66.08 million from RM54.6 million.
Assuming an annualised earnings per share of 1.94 sen, the stock is trading at a price-earnings ratio of 18.29 times at a share price of 35.5 sen.
The company’s gross profit margins expanded to 29% in 1HFY2025, up from the 25% to 28% range recorded over the past four financial years, reflecting improved cost efficiency and a shift towards higher-value contracts. Its net margin, however, fell slightly to 14.4% in 1HFY2025 compared with 15.5% previously.
The group maintains a strong balance sheet, with a gearing ratio of just 0.02 times and net cash of RM68.93 million as at June 2025.
