KUALA LUMPUR: Globetronics Technology Bhd is poised to hit record monthly production volumes for its sensor division this year, exceeding its peak volume production in 2015, said the group’s corporate director Ng Kok Yu.
“Maybe it will be about 35 million units per month; we can’t tell [exactly] how much yet for FY17 (financial year ending Dec 31, 2017), as it will be dependent on how the ramp-up goes,” said Ng in an email reply to The Edge Financial Daily recently.
The Penang-based maker of integrated circuits and optoelectronic products is expecting to see a ramp-up in production volume for its new sensors — gesture and light sensors — this year as demand increases.
“We are starting to see the gesture sensor volume picking up for FY17 and expect it to continue improving going forward as its application moves beyond peripherals. For the smart light sensor, we are looking at a mass production date in the second quarter and most likely starting some small volume in May and picking up to full loading by the third quarter,” said Ng.
The gesture sensors are currently used in wireless earbuds manufactured by its US-based customer. Currently, the production volume averages only three million to four million units per month because they are sold separately as a peripheral accessory, said AllianceDBS Research analyst Toh Woo Kim in a report dated Jan 13.
Ng said that there is a possibility that its gesture sensors will be bundled with the premium version of an end customer’s smartphone.
Meanwhile, the light sensors will be used in its US-based customer’s new devices — like smartphones, tablets and personal computers.
This comes after a challenging FY16 for the company when earnings fell 63.9% to RM25.72 million from RM71.31 million previously as demand for its sensor division waned. Revenue also took a hit, skidding 37.3% to RM215.35 million from RM343.66 million a year ago.
Ng explained that Globetronics’ customer was holding back orders in FY16 as the customer was preparing for a big upgrade for its smart devices this year.
“We expect to see an improved performance in FY17 as the utilisation of our existing sensor lines picks up and we also have new components expected to be launched in the second quarter to add to total volume produced,” he added.
Late last year, Apple Inc launched its new product called the AirPods, essentially wireless earbuds that pair almost instantly with the iPhone without relying on Bluetooth. The AirPods are embedded with sensors with features that will automatically mute a song when one bud is removed or tapping the side of the bud to activate Siri.
Besides the sensor division that will help give a boost to earnings this year, Ng said that the company’s light-emitting diode (LED) division is another growth area of Globetronics to look out for.
Globetronics will be getting orders for the sawing and sorting of infrared LED products from its European customer, where it will be used for biometric identification in premium smartphones. It is also producing niche LED components for a customer based in the US.
“While we had some volume in FY16 from our European customer, the order was for one product type and was only produced for a few months. We expect to get orders for a few product types in FY17 with new and sustained volume loadings.
“We also made inroads in producing niche LED components for a US customer in FY16, with the product expected to show growth as well as more consistent loadings in FY17 after establishing a stable market base. There is also a new product in development with this US customer to develop laser LED for car headlamps, with the product now in [the] prototype stage and expected to start mass production at [the] end of FY17,” Ng elaborated.
Over the past one year, Globetronics’ share price has fallen about 16% from RM5.45 apiece.
Based on its last closing price of RM4.82 last Friday, it was trading at a forward price-earnings ratio of 22.74 times, according to Bloomberg data.