KUALA LUMPUR: As US-China trade tensions escalate, local electrical and electronics (E&E) players are hoping to see light at the end of the tunnel.
This is because the worsening trade brawl between the two economic powerhouses has caused the E&E sector to experience a slowdown.
Homegrown semiconductor company, SilTerra Malaysia Sdn Bhd chief executive officer Firdaus Abdullah said, the chipmaker was currently balancing its revenue portfolio and exploring new areas.
“The Chinese are now facing uncertainty from the trade war. Hence, we have put a contingency plan in place as we need to balance out the impact from the China trade with businesses from other regions such as Europe. It’s prime time for Plan B,” he told Bernama.
Currently, China alone contributes 34 per cent of the total company revenue, while 11 per cent is from the US and 31 per cent from Taiwan, with Europe contributing 24 per cent.
“We do hope that the situation gets better, but if it worsens, we have to be prepared and face it head on,” Firdaus said.
SilTerra, a wholly-owned subsidiary of Khazanah Nasional Bhd, supplies chips to Google, Apple and Amazon products, among many others.
Besides China, the company has also diversified its core business from traditional chip making for computers and phones to those for the automotive industry, life sciences, the Internet of things (IOT), as well as the arena of photonics-based chips for data-servers and telecoms.
As of last year, the new segments SilTerra has diversified into, contributed around six per cent of the total revenue and the company is keen to expand the figure in this new space.
“The potential for these segments is huge and we want to be at the forefront of game changing innovation. We are aiming for at least a two-fold growth in these segments within the next year’, Firdaus said.
The trade tensions between the US and China has escalated over the past week, with technology companies taking a direct hit and the US announcing a trade blacklist against China’s tech giant, Huawei.
Following this, several US-based tech companies including Intel, Broadcom and Qualcomm have stopped supplying components to Huawei. Google too abruptly rescinded Huawei’s Android licence.
Analysts have expressed concerns on the worsening situation, as China might retaliate by banning US products into the country, which would have a dampening effect on the E&E sector. – Bernama
