PETALING JAYA – VS Industry Bhd’s (VSI) margins are likely to continue facing challenges, especially from increased labour and utility costs.

Hong Leong Investment Bank (HLIB) Research said the group’s underutilised facility and cooling demand for consumer electronic products could also have an impact on margins.

“We foresee that customers will remain cautious in placing orders with the soft macro outlook and high interest rate environment. The tough economic environment continues to put a strain on operational expenditures with increase in labour, utilities and financing costs.

“Management continues to adopt prudence in ensuring a lean and efficient operating landscape to mitigate the increased costs.”

For the second quarter ended Jan 31, 2024, the company registered a net profit of RM16mil, which was slightly over half the net profit of RM30.36mil in the year-ago quarter. Consequently, its earnings per share fell to 0.42 sen from 0.79 sen previously.The group reported revenue of RM895.02mil, down from RM1.15bil in the previous corresponding quarter.

For the six-month period ended Jan 31, 2024, VSI’s net profit dropped to RM64.99mil from RM91.07mil in the previous corresponding period, while revenue stood at RM2.05bil, compared with RM2.4bil a year earlier.

HLIB Research is trimming its financial year 2024 (FY24) and FY25 forecast down 42% and down 6% respectively, adjusting for lower sales and margin challenges in the near term.

Meanwhile, RHB Investment Bank said that the worst could be over for VSI.

“Management guided that customer X’s order volume is gradually recovering and this should support a quick earnings rebound sequentially.

“Also, customer X has new product launches, in which VSI will participate in. The order volumes from its other key customers are growing steadily.”

The research house added that VSI is focusing on upgrading its capabilities by offering more services and solutions to its customers.

“This should bear fruit soon by enhancing its profit margins. We assume FY25 net margin will expand by 1.1 percentage points year-on-year to 5.1%.

“Ongoing discussions with prospective customers are also seeing good progress and VSI is hopeful of a positive outcome as soon as end-2024.”

Meanwhile, CIMB Securities said VSI is entering an earnings upcycle with core net profit growth of 34.2% and 24.5% in FY25 and FY26 respectively.

The research house said this would be backed by recovery in sales orders, introduction of new product models, acquisition of new customers and margin accretions from enhancements in value chain.

“VSI’s significant operational scale and on-going efforts in vertical integration positions it well to benefit from opportunities arising from the prevailing China+1 trend.

“VSI’s share price is supported by FY25 to FY26 dividend yields of 2.3% and 2.8%, respectively, backed by its strong balance sheet (0.07 times net gearing and RM699mil in cash balances as at end of the second quarter of FY24).”

CIMB Securities, however, said potential downside risks include continued sluggishness in the global consumer electronics market and potential reduction in or redirecting of orders from its key clients to other contract manufacturers in other regions.

PENANG, MALAYSIA – Electronics manufacturing services provider, ESCATEC, is using material handling robots on the production floor of its Malaysian factories in the latest example of the Group’s ongoing commitment to optimize operational efficiency by integrating the latest automation and technology.​​​​​​​

​PUDU Robotics material handling robots have been deployed at ESCATEC’s Malaysian plants in Penang and Johor Bahru. They are equipped with advanced features such as 3D omnidirectional obstacle avoidance sensors, all new LIDAR sensors, visual camera positioning, independent navigation, and all new independent suspension.

Following extensive in-house trials, ESCATEC has deployed the robots to pick and deliver wave/selective solder pallets and a variety of jigs, fixtures, and tools within the production environment. As the users gain experience, the robots’ job scope will expand to the transportation of finished goods and raw materials

The material handling robots are already earning tangible benefits at both Malaysian sites, says ESCATEC CEO, Charles-Alexandre Albin.

He notes that by optimising routes and layouts on the production floor, the robots reduce the time taken for deliveries to the assembly lines while requiring less manpower to be present, “which helps a lot given our high mix portfolio with lots of changeover”. The project’s ROI is a little more than a year and ESCATEC can roll out similar robots at its other production sites globally if necessary.

“This latest deployment of material handling robots showcases ESCATEC’s dedication to staying ahead of the curve in manufacturing innovation,” emphasised Albin.

CLINTON, NY – Indium Corporation’s Senior Global Product Manager for Semiconductor and Advanced Materials, Sze Pei Lim, is scheduled to present at the International Conference on Electronics Packaging (ICEP 2024). The presentation will take place on April 18 in Toyama, Japan, as part of the iNEMI session. During the presentation, Lim will discuss the results of a technical paper titled Low-Temperature Material Discovery and Readiness for First-Level Interconnect in Semiconductor Packaging. The full conference is being held April 17-20.

Today’s industrial needs necessitate more in-depth study into the assembly process challenges, materials properties, reliability performance, and feasibility of employing low-temperature material for first-level interconnects. Most of the current flip-chip, or first-level interconnects, use SAC alloy solder bump or SnAg alloy on Cu-pillar. With both the thinning and enlargement of die, warpage is a constant challenge in the assembly process. Lower die-attach temperatures help to minimize warpage caused by high temperatures, while temperature-sensitive substrates, die, and sensors may also require lower processing temperatures. Interconnect materials with a hierarchy of various processing temperatures are necessary to prevent remelting during subsequent reflow processes. Lastly, lower processing temperatures reduce energy consumption and minimize carbon footprint in the manufacturing process.

“If Sn-Bi-based solder alloys are carefully designed, with optimized production processes, SAC and low-temperature solder hybrid joint systems can revolutionize thermomechanical and fatigue performance with benefits such as low-temperature reflow and better drop and thermal shock resistance to high-temperature applications,” said Lim.

As the Senior Global Product Manager for Semiconductor and Advanced Materials, Lim works closely with the R&D and manufacturing teams and collaborates with leading semiconductor companies and contract manufacturers around the world. She is a task force member of the International Electronics Manufacturing Initiative’s (iNEMI) Packaging Technology Integration Group and has co-chaired several industry projects and road mapping initiatives over the past five years. She is also a member of the executive committee of the Institute of Electrical and Electronics Engineers (IEEE) Packaging Society Malaysia Chapter. Lim is a part of the organizing committee for the International Electronics Manufacturing Technology (IEMT), and has authored several technical papers. She regularly presents at international technical conferences. Lim earned her bachelor’s degree from the National University of Singapore, where she majored in industrial chemistry with a focus on polymers. She is a Certified SMT Process Engineer and has earned her Six Sigma Green Belt.

HALFMOON, NY – PVA, a global supplier of automated dispensing and coating equipment, is pleased to announce that Jon Urquhart, Global Director of Applications Engineering, will present at the SMTA Heartland’s High Reliability: Strategic Technology Advancement Research (STAR) Forum. The event is scheduled to take place on Thursday, May 2, 2024 at the Embassy Suites by Hilton Kansas City Olathe.

In his presentation “Protecting Electronics – An Overview of Conformal Coating, Encapsulation, and Potting,” Urquhart will delve into the critical aspect of safeguarding electronic assemblies from environmental factors to prevent failure. While designers and manufacturing professionals acknowledge the importance of protection, configuring automation in a production environment can be challenging. Urquhart’s presentation will provide valuable insights into three commonly used methods of protecting electronic assemblies using liquid formulations: conformal coating, encapsulation, and potting.

The presentation will cover essential topics such as the materials used, application methods, real-world examples, and troubleshooting tips to ensure a successful manufacturing process. Attendees can expect to gain valuable knowledge and practical strategies to enhance the reliability and longevity of electronic products.

Urquhart has served as PVA’s Senior Application Engineer since 1993, boasting extensive expertise in fluid material processing within production environments. He is highly sought after by both material manufacturers and end-users for his ability to optimize processes and recommend efficient automated equipment and application solutions. Urquhart holds multiple patents for spray valve designs and coating machine configurations. With more than 20 years of practical experience, he is recognized as a leading authority in the selective application of conformal coating materials, contributing significantly to the advancement of manufacturing processes.

For more information about PVA, please contact PVA at info@pva.net or (518) 371-2684.