KUALA LUMPUR (Dec 3): JF Technology Bhd (KL:JFTECH) is set to begin selling and distributing its products in the US by January 2025, following a cross-licensing agreement signed with US-based Ironwood Electronics in July. 

Its co-founder and managing director Datuk Foong Wei Kuong said JF Tech has taken a more strategic and collaborative approach to enter the US market. 

Instead of going directly into the market on its own, the company has opted for a cross-licensing agreement, which allows Ironwood to promote and sell JF Tech's products across the US, Europe, and other global markets, leveraging their distribution network and expertise.

"Our US market entry is going very nicely," he told The Edge, following the group's annual general meeting (AGM) on Tuesday. 

"We are approaching the US market differently this time by working with an established US company, to ensure that our products meet the necessary standards and reach a broader customer base efficiently, all while protecting our intellectual property.”

In 2014, the semiconductor test-probe maker was hit with a patent infringement lawsuit by an American rival, which halted the sale of its product, Zigma, in the US. As of April this year, the patent restrictions on Zigma have expired, and thus, the injunction order in the US has also been lifted. 

As part of the collaboration, Foong said that Ironwood's technical team has undergone intensive training to ensure proper handling, installation, and assembly of JF Tech’s products.

He said this includes technical and sales training for Ironwood’s staff who will be responsible for rebuilding and assembling JF Tech’s sockets, which are key components in semiconductor testing.

"They (Ironwood) carry out a lot of data collection on our product. They must be satisfied that our product works and looks very well. This is to make sure that the requirements for electrical properties, mechanical properties, and dimensional properties are met, so they can see for themselves how good the product is before they can launch it.

"I was updated this morning that they are very happy with the result," Foong added. 

Meanwhile, Foong said that JF Tech's recent acquisition of two Singapore-based companies, totalling RM26 million, forms a critical part of the company's strategy to vertically integrate its operations, positioning JF Tech as a comprehensive semiconductor solutions provider for its global customer base.

"We expect to grow strongly in both the companies because the demand for probe components is increasing, and because [of] the over 200 customers that we have are not served. So with this [acquisition], we are the only Malaysian company in this probe parts (business), and with this size," he said. 

Last month, JF Tech announced that it is buying all stakes in Singapore-based Transcend Target Companies for S$6 million (RM19.91 million). Separately, it also announced the acquisition of an 80% stake in frontend wafer testing Q3 Probe Pte Ltd from Spire Manufacturing Inc, which is incorporated in the US but based in Singapore, for US$1.36 million (RM5.96 million).

The two acquisitions are set to bolster JF Tech’s product offerings, particularly in the areas of probe components and distribution services. 

Foong said that the integration of Q3 Probes into JF Tech's portfolio will strengthen the company’s capabilities in manufacturing and the provision of probe parts, while Transcend Target Companies will enhance its distribution capacity.

"What we're going to do is that we're going to copy and paste one of the company's product lines from Singapore to Malaysia, to serve our 200 over customers worldwide. We will be cost competitive because at the moment, this company has been very profitable all these years. Their coverage is not as wide as ours, and their cost is also higher because they run a factory in Singapore, whereas in Malaysia, I think our cost is lower," he explained. 

" I think our cost is more competitive, so we can probably have a better margin, not necessarily to sell at cheaper price, but [for] better margin," Foong added.