Semiconductor firm sees 10% growth in ’13

Laguna-based semiconductor manufacturer Cirtek Holdings Philippines Inc. expects to grow its core business by 10 to 12 percent this year, outpacing peers in the industry, given a strong momentum seen in the first semester.

“Sales from our top 10 customers increased by 18 percent in the first six months of 2013 and we expect the trend to carry over for the rest of the year,” Cirtek chief finance officer Anthony Buyawe said in an interview with Inquirer.

In terms of application, Buyawe said demand was being driven by communication such as wireless applications, wireless infrastructure and hand-held devices such as tablets and laptops. He likewise cited demand from the automotive industry for electronic systems that improve safety, ensure efficient engine management and involves a more complicated drive train.

Quoting a PricewaterhouseCoopers study, Buyawe said the average electronic content in vehicles was expected to grow from $310 per vehicle in 2010 to $492 per vehicle in 2015.

Overall, the global semiconductor industry is projected to grow between 4.5 and 8 percent this year but Cirtek anticipates industry growth to be affected by challenging macro and market conditions. Cirtek is confident, however, that it can “sustain its growth momentum and continue to outperform the industry.”

For the third quarter, Cirtek expects its core business to grow by 10 percent, with revenues from new projects seen contributing 2-5 percentage to total growth, based on its latest financial report.

Cirtek has also vowed to maintain strict cost control programs and minimize its capital expenditure for the remaining two quarters of 2013 to consolidate full year operating performance.

In the first semester, Cirtek grew its net profit by 12 percent year-on-year to $2 million as margins stabilized and sales expanded despite weak recovery in advanced economies. For the first half of 2013, Cirtek posted an 11-percent growth in net sales to $21.4 million.

The company said its manufacturing arm was focusing on improving assembly and packaging capabilities, operational efficiency, and reduction of unit manufacturing cost. On the other hand, sales and marketing focus was on solution-selling skills, effective coverage of current and prospective customers and expansion of Asia market.

In the first semester, sales to Cirtek’s top 10 customers rose by 18 percent year-on-year. In terms of revenue by application, at least 40 percent of its output for the period went to communication, 20 percent to computing, 20 percent to consumer electronics, 10 percent to industrial and 10 percent to automotive.

Cash and cash equivalents amounted to $12.6 million as of end of June.

“Cirtek continued to focus on R&D (research and development) activities in order to create innovative and cost-effective solutions to customers,” the company said in its latest report.

Gross margin was stable at 13 percent in the first six months despite cost pressures. This was attributed to the company’s effective cost reduction programs. Doris C. Dumlao