U.S. electronic firms in Malaysia see recovery in fourth quarter
U.S. electronic firms in Malaysia see recovery in fourth quarter
KUALA LUMPUR (AFP): Major U.S. electronics firms in Malaysia
expect sluggish exports to rebound from October onwards but
forecast a 12 percent drop in their sales this year, an industry
group said Tuesday.
The Malaysian American Electronics Industry (MAEI) said total
sales of its 18 members were expected to fall to 38.7 billion
ringgit (US$10.18 billion) amid the global downturn, from 43.9
billion last year.
Semiconductor and non-semiconductor sales were forecast to
decline by 12.7 and 11.3 percent respectively according to a
recent MAEI survey, said MAEI chairman Teh Chin Bin.
"The general assessment is that the third quarter could be the
bottom," Teh told a press conference. "There is a general
expectation of positive growth going into next year."
Among MAEI members are world number one chip-maker Intel
Technology, Advanced Micro Devices, Motorola, Western Digital,
Dell Asia Pacific, Seagate Industries, Texas Instruments and
ChipPac.
Last year, the group accounted for 20 percent of Malaysia's
electronics exports and 14.2 percent of total manufactured
exports.
The survey said investment from MAEI companies was expected to
fall to 1.8 billion ringgit this year, down from 2.6 billion in
2000.
But allocation for research and development is seen rising 10
percent to 251 million ringgit, while procurement of local
materials and services is also expected to increase 10 percent to
7.4 billion.
Nicholas Zefferys, president of the American Malaysian Chamber
of Commerce, which is the umbrella body for MAEI, described the
industry downturn as a "temporary trial."
"We are bouncing along the bottom. Purchases of chip-making
equipment have started to increase in the last three months which
speaks positively for the future," he told AFP.
"This is a temporary slowdown. The IT revolution continues and
we'll see a resumption of growth. There'll be an industry
shakeout, no question, ... but the stronger companies, those that
are engaged in new product development, research and development,
will be the winners.
Zefferys said the U.S. electronic sector had become "meaner
and leaner" after selling off most of the inventories built up
last year amid strong growth of Windows 2000 and dotcom
companies.
"All the write-offs and all the layoffs that you have seen in
the U.S. means they are going to come back with strength and
earnings per share are positioned to start increasing in the year
2002," he added.