KUALA LUMPUR (April 12): Automation system maker MMS Ventures Bhd (MMSV) seeks to expand its original design manufacturing (ODM) business amid anticipation of slow sales in the semiconductor segment this year.

The company said its ODM business showcases its design and development strengths, albeit marketed under global branding.

“We have seen tremendous opportunities in the ODM/original equipment manufacturer (OEM) businesses and we are happy to report that we are currently engaging with a number of customers with the intention to capture their potential business,” chairman Tan Hock Hin said in MMSV’s 2022 annual report released on Wednesday (April 12).

The ODM/OEM segment made up 20.5% of the group’s RM52.87 million revenue for the financial year ended Dec 31, 2022 (FY2022).

Tan said the group’s continued efforts to penetrate into other industries have shown positive signs of early success in 2023, and this also includes the diversification of its machine platform to capture orders from customers involved in the medical equipment industry.

“The progress and growth in this medical industry will be stable and steady. We have every intention to capitalise on this breakthrough and broaden our business and customer base over time accordingly,” Tan said.

He said MMSV anticipates its smart phone customers to remain with their current generation of products that are 5G-enabled.

“With little changes to the existing features of their products, we expect orders from this segment to be slow for 2023,” he added.

In the annual report’s management discussion and analysis section, MMSV said that in line with the sharp and prolonged downturn in the semiconductor industry, compounded with minimal changes in smart devices features, sales from the segment are expected to remain slow in 2023.

Similarly, the company said demand for both automotive and general lighting is expected to be lacklustre for the same timeframe.

“However, the light at the end of the tunnel comes from the gradual pickup in demand from customers of other segments in the second half of 2023 onwards,” it added.

MMSV noted that competitive pressure from both local and overseas players has made business challenging.

“Apart from the equipment makers from our own local market, we also face stiff competition predominantly from Asia and European countries. To remain competitive, we will reinforce our position to sell machines with efficient design, without compromising their quality,” it said.

It added that this can be achieved by recruiting experienced and innovative design engineers to meet customers’ specific requirements, investing in training and developing technical and non-technical staff, and applying technology for product improvements and innovations.

According to MMSV, the shortage of skilled technical workers and engineers within the automation industry has always been a concern for the industry.

The Penang-based company said engineers who are experienced, skilled and innovative, capable of designing efficient and cost-competitive machines, are hard to find and are in high demand.

“To overcome this, we have participated in career fairs conducted by the various leading universities in the country. We have also provided industrial training to students from relevant fields with the aim of developing their potential, even before we officially recruit them,” it said.

For FY2022, MMSV recorded a 39% jump in revenue to RM52.87 million from RM37.98 million in the preceding year, mainly due to an increase in the number of inspection and testing machines sold. Its net profit also rose to RM9.05 million, from RM8.25 million previously.