KUALA LUMPUR (Oct 16): Electronics contract manufacturer Cape EMS Bhd (KL:CAPE) is collaborating with Taiwan-listed FIC Global Inc (FICG) to serve as its strategic partner in the latter’s optical transceivers manufacturing expansion in Johor.

Cape EMS entered into a memorandum of agreement with FICG’s unit Pro3C (Malaysia) Sdn Bhd, which has a targeted US$2 billion (RM8.16 billion) manufacturing revenue, to support the latter’s manufacturing operations in Senai.

As part of the deal, Pro3C will subscribe to 50 million redeemable convertible preference shares (RCPS) of Cape EMS at RM1 a piece for RM50 million, Cape EMS said in a filing.

Pro3C’s Johor facility currently has eight surface-mount technology (SMT) production lines, and the company intends to expand this to 18 lines by 2027.

Optical tranceivers convert electrical data signals into light pulses for fibre optic transmission and vice versa, while SMT allows the modules to be soldered directly onto the surface of a printed circuit board (PCB).

Under the deal, Cape EMS said it will provide “a turnkey, end-to-end operational ecosystem to accelerate Pro3C's market deployment”.

“Under the agreement, Cape EMS will serve as Pro3C’s local strategic partner in Johor, supporting its planned expansion through integrated manufacturing, supply chain management, facilities, and operational support services,” it said in a separate statement.

On the proposed RCPS, proceeds from the issuance will be used for capital expenditure for production facilities and renovation (RM12 million), capex for equipment (RM25 million), and operating expenditure (RM12.73 million).

The RCPS comes with a five-year tenure, and convertible at between 30 sen and 65 sen to up to 166.67 million Cape EMS shares representing 14.38% of the company’s enlarged issued share capital.

The proposal “represents an important opportunity to revitalise our EMS business and reposition our Group within the rapidly growing AI and advanced electronics manufacturing ecosystem,” said Cape EMS group MD and CEO Christina Tee.

“The signing of this memorandum of agreement reflects our confidence in Cape EMS Bhd as a strategic manufacturing and operational partner in Malaysia,” FICG chairman Leo Chien said.

“As Pro3C continues to expand its advanced manufacturing operations to support growing demand for AI infrastructure and next-generation optical interconnect technologies, having a capable and experienced local partner is important to our long-term development.”

Cape EMS, which changed its financial year in 2025 amid huge losses, closed the year ended June 2026 (FY2026) with a net profit of RM14.4 million or 1.45 sen per share, on revenue of RM425.6 million.

Cape EMS shares settled up a sen or 3.33% on Friday to 31 sen, giving it a market capitalisation of RM307.52 million.

FICG shares settled up 9.98% on Friday, to close at NT$66.10 (RM8.33), giving it a market capitalisation of NT$15.64 billion (RM1.97 billion).