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U.S. tech firms in Malaysia cut revenue forecast

Posted: 22 Jun 2007 ?? ?Print Version ?Bookmark and Share

Keywords:Malaysia electronics? U.S. tech firms? revenue forecast?

Despite the Malaysian American Electronics Industry consortium's (MAEI) prediction that total sales for its members will grow by 7 percent, major U.S. electronics companies based in the country cut their revenue outlook due to uncertain market environment.

The MAEI, which includes firms such as Intel, Dell, and AMD, expected total sales for its members to grow by 7 percent this year to $22.8 billion. The forecast was issued under the earlier prediction in March, which estimated that revenues would rise over 10 percent in 2007.

'Uncertain market'
The industry group blamed "development in price pressures (and) uncertain market conditions" for its cautious outlook, though chairman Wong Siew Hai was optimistic the situation would improve towards the end of the year.

"The second half of 2007 is expected to perform better than the first because of seasonal sales and companies introducing new products," he said. "Consumer confidence seems to have held up and spending on electronics products will continue to increase due to lower prices, higher performance and functionality."

MAEI's revenues soared nearly 11 percent to last year to hit $21.3 billion, despite a slight downturn in semiconductor sales. The group's output accounted for over a quarter of Malaysia's total electronics exports in 2006, and 22 percent of the chips shipped out of the country.

The survey showed total capital expenditure for the association reached $653 million last year and is likely to drop to just under $580 million this year. MAEI said heavy competition was forcing members to rein in spending by boosting productivity and asset utilization.

Hiring cap
MAEI's members also plan to keep a tight lid on hiring, with the total number of workers they employ remaining flat at about 54,000 this year. Companies said they were looking to source more technical and engineering personnel as their Malaysian operations move up the value chain, and urged the government to encourage more locals to pursue advanced degrees in science and engineering to meet expected demand.

MAEI also called on authorities to address infrastructure costs and security lapses, which were highlighted by a high-profile theft of $12 million worth of chips and motherboards from a warehouse in Penang, a major industry hub, late last year.

- Jonathan Hopfner
EE Times

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