KUALA LUMPUR (May 16): Mi Technovation Bhd (KL:MI), a semiconductor solutions provider, reported a 34.4% year-on-year drop in its first quarter net profit, due to unfavourable foreign exchange (forex) movements, lower interest income and increased tax expenses.

Its net profit for the first quarter ended March 31, 2025 (1QFY2025) fell to RM17.59 million from RM26.79 million in 1QFY2024, despite revenue rising 11.6% to RM119.55 million from RM107.13 million, its bourse filing on Friday showed.

The group said the lower profit was due to a foreign currency fluctuation loss of RM1.3 million in 1QFY2025, as opposed to the RM10.5 million gain it recognised in 1QFY2024. Additionally, interest income almost halved to RM1.97 million from RM3.73 million.

Excluding the impact of foreign currency fluctuations, its profit before tax showed improvement, it said. This was driven by stronger operating performance and a positive product mix, despite a RM5.1 million loss incurred by its newly-established semiconductor solutions business unit (SSBU). The SSBU loss was attributed to higher research and development staff costs, and related development expenses.

No dividend was declared during the quarter under review.

Its semiconductor equipment business unit (SEBU), which accounted for 61.1% of total revenue, saw topline rise 19.1% to RM73 million. This growth was fuelled by strong demand for the Mi Series Die Sorter in the high-performance computing (HPC) and memory segment within the Southeast Asian market.

Topline at its semiconductor material business unit (SMBU), which contributed about 38.9% of total revenue, was little changed at RM46.5 million. Demand across all its segments — mobility & wearables, HPC & memory, and automotive & renewable energy — remained relatively stable compared to 1QFY2024, the group said.

The SSBU unit reported revenue of RM15,000 in 1QFY2025, up from RM4,000 last year, primarily from sales of services and samples.

Mi Technovation is anticipating continued revenue growth for its SEBU in the second quarter of 2025, driven by consistent sales of the HPC & Memory Mi Series Die Sorter. But the unit's outlook for the second half of 2025 remains uncertain, it flagged, due to potential disruptions in the semiconductor ecosystem arising from ongoing US-China trade tensions.

Its SMBU unit is expecting strong order increases in the second quarter of 2025, potentially leading to unexpected early-year growth. This expansion is driven by rising demand for AI-integrated specialty alloys in the mobility & wearables segment and increasing requirements for high bandwidth memory in HPC & memory.

Its SSBU, meanwhile, is making progress with its first in-house power module pilot production line, it said, aiming for prototype builds by mid-2025 to meet the growing demand for energy-efficient power solutions in the automotive and industrial markets.

Shares of Mi Technovation closed two sen or 1% higher at RM1.94 on Friday, giving the group a market capitalisation of RM1.75 billion. Year to date, the stock has fallen almost 15%.