• KESM Industries (KESM), which provides burn-in or testing services for semiconductor chips, is expecting another record year for its FY17 results ending 31 July 2017. The company recorded sales of RM263 million in FY15, RM285 million in FY16, and aims to achieve RM300 million sales for FY17.
  • KESM takes priority on the automotive segment, though it also caters to clients in other sectors including commercial, industrial and military. The automotive semiconductor market is valued at US$21.5 billion (RM96 billion) and is estimated to reach US$28 billion (RM126 billion) at a compounded annual growth rate of 6.8 percent between 2016 and 2019.
  • More than two thirds of KESM’s revenue comes from customers in Malaysia, 20 percent from China, while those from other countries contribute to the remaining portion. Two major customers alone account for around 68 percent of the company’s FY16 revenue.
  • KESM operates in a capital-intensive industry, with its capital expenditure ranging between RM80 million and RM90 million a year. The group has RM103.7 million cash as at 31 October 2016, and is on the lookout for funding options.

Significance: For FY17, KESM aims to maintain its leadership position, ride on the automotive growth and expand its market share.