KUALA LUMPUR (July 2): Stratus Global Holdings Bhd expects to more than double its manufacturing capacity over the next two years as it expands its Penang operations to meet growing demand from the global semiconductor industry.
Executive director and chief executive officer Ryo Narisawa said the group's new manufacturing facility will increase its factory space to about 300,000 sq ft from 117,000 sq ft currently.
The group has earmarked RM20 million from the proceeds of its initial public offering (IPO), which is scheduled for July 21, for the expansion.
Narisawa said the new facility is expected to deliver an initial 50% increase in capacity by the middle of next year, before reaching about nearly triple the current level by end-2027 or early 2028.
Capacity could eventually rise to four to five times current levels when the company introduces double-shift operations.
"We have been operating on a single shift. By going into double-shift operations, capacity can be about four to five times," he told reporters after the launch of the group's prospectus on Wednesday.
WATCH: Stratus Global to more than double capacity
Narisawa said the expansion comes as demand for semiconductor automation solutions continues to strengthen, driven by artificial intelligence (AI), even though Stratus does not directly serve leading AI chipmaker Taiwan Semiconductor Manufacturing Co.
Instead, the group supplies automated material handling systems to second-tier semiconductor manufacturers, which are seeing rising utilisation as production of mid-range chips shifts from top-tier manufacturers.
"Many of them were operating at 70% to 80% capacity two years ago.
"Now many are operating at 100% capacity, and that is likely to continue. That will prompt many companies to invest in new factories or expand existing ones," he said.
The group also plans to strengthen its overseas presence by setting up sales and engineering support offices in Japan, Taiwan, Germany and the US, mainly to provide faster customer support and pursue new business opportunities.
According to its prospectus, Stratus serves semiconductor manufacturers with automated material handling systems used in wafer fabrication facilities and is expanding beyond front-end semiconductor manufacturing into the back-end and mid-process segments.
It also recently secured two new major customers in North America as it broadens its global footprint.
As at the latest practicable date, the group had an unbilled order book of RM108.4 million, with most of the contracts expected to be recognised over the next two financial years.