GEORGE TOWN: The rapid expansion of the supercomputing server and digital entertainment equipment industries will drive PIE Industrial Bhd’s growth this year.
Group managing director Alvin Mui told StarBiz that the group’s new customer in the supercomputing server business would contribute more than 20% to its revenue this year.
“We will be ramping up our production of servers in the first half of 2022.
“Our digital entertainment equipment business, on the other hand, will contribute over 40% to the revenue this year compared to 20% in 2020,” Mui said.
PIE’s industrial electronic and electronic home appliances, telecommunications, and raw wire and cable assembly segments will generate the remaining 40% of the group’s revenue.
He added that PIE, an associate business unit of iPhone manufacturer Foxconn, was on track to hit sales of RM1.3bil this year.
The group posted revenue of RM1.03bil for the financial year ended Dec 31, 2021 (FY21), a 49% year-on-year increase from RM686.35mil the previous year. Net profit rose 30% to RM58.47mil from RM44.92mil previously.
Mui noted that the global server market, valued at US$83.6bil (RM350.08bil) in 2020, is expected to expand at a compounded annual growth rate (CAGR) of 7.8% from 2021 to 2028. This should give the group good grounds to grow its business.
PIE Industrial factory in Seberang Jaya
Additionally, the household appliances market is projected to hit US$600bil (RM2.51 trillion) by 2024.
“China and India, two of the biggest developing economies globally, are estimated to be the growth avenues for Asia-Pacific household appliances market.
“One such rapidly expanding segment is the cordless vacuum cleaner market, which is expected to register a CAGR of 12.2% in terms of revenue over the next five years.
“The global market size will reach US$4.09bil (RM17.14bil) by 2027 from US$2bil (RM8.38bil) in 2020,” he said.
Mui added that Foxconn’s forthcoming electric vehicle (EV) plant in Thailand, currently undergoing construction, would allow PIE to supply its wire harness and cable assembly products, boosting the division’s business in Thailand.
“According to Foxconn, its Thai plant will initially cater only to the Thai market but exports to neighbouring countries within the Asean trade bloc are part of its mid-term plan.
“The planned annual capacity for the Thai plant will be between 150,000 and 200,000 cars.”
Separately, its printed-circuit board (PCB) assembly business is also expected to grow with the demand for PCB.
“An increase in the demand for PCBs means that our PCB assembly division will be busy mounting the boards with electronic components. Rising EV sales will propel the consumption of PCBs,” Mui said.
PCBs are used to connect electrical components in EVs, such as control and power management, audio and display systems, and to produce charging stations for EV users to charge their vehicles.
He said the group’s RM150mil new production building with a build-up area of 150,000 sq ft would start operating in June 2022. “It will raise production capacity by over 20%.”
Mui added that new cable and wire manufacturing and sub-assembly activities will be shifted to Thailand because of the labour shortage in Malaysia.
Malaysia remains the main contributor for PIE, generating over 90% of the group’s turnover, followed by Thailand and Singapore in terms of geographical locations.