- UMS Integration (SGX:558) offers a play on the recovery in front-end semiconductor sector recovery. We expect the sector to recover this year and towards 2025.
- Global semiconductor capacity is expected to increase by 6% y-o-y in 2024 and 7% y-o-y in 2025 (2023: +5.5% y-o-y), according to SEMI’s World Fab Forecast report. This makes UMS’ key customer and, in turn, UMS itself key beneficiaries of the semiconductor recovery trend.
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New customer and Penang facility to drive growth.
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- FY24 revenue guidance for this new customer is positive, and estimated at US$30m. Thereafter, orders from this customer should grow progressively. We expect a ramp-up in orders from the customer from 2H24 onwards.
- There are also plans for another assembly plant, post its recent equity fundraising exercise, to increase production capacity. This, in turn, should facilitate customers scaling up their orders in the future. We believe UMS will target more complex, medium-and large-format components to boost customer stickiness.
Semiconductor equipment sector expected to grow into 2025.
- Read more at SGinvestors.io.
