Frontken Corporation Berhad 200401012517 (651020-T) • ANNUAL REPORT 2023 14 Our employees at our production line aisle Taiwan – In FY2023, AGTC recorded a revenue of RM 327.8 million, a slight decrease of 6% compared to the previous year mainly due to a lower-than-expected semiconductors’ fabs utilisation rate. We began to see a slow-down in activities by our customers early in the year. As such, during the start of the year, we took various measures such as reducing unnecessary spending, minimise expenses, optimising workforce, and focus on fostering strong relationships with customers and suppliers. There were no easy solutions, but we did not waver and continue to not only deliver on short-term expectations, but focus on our long-term goals leveraging on our strength and capabilities. Our hard work paid off early this year when our customer qualified us for a few key projects that we have been working with them for the past 12 to 18 months. These projects, we believe will contribute positively to the Group’s performance. For Plant 2, we are making good progress and have already started with the new advanced cleaning technology that was mentioned in my statement last year. We believe that Plant 2 will allow us to gain efficiency improvement in the long run and at the same time strengthen our position as the leading advanced high precision chamber parts service provider in the region for many years to come. Our strategy has always been to invest for long-term sustainable growth. To that end, we will continue to look for new land for future expansion should Plant 2 runs out of capacity. Frontken Singapore (Semicon) – The ongoing semiconductor slowdown, exacerbated further by rising manpower and material costs and limited pool of local talent has had quite a big impact to our business. To mitigate the situation, we renegotiated some of our contracts with our customers to adjust prices for certain parts so that the same may be more aligned with the increased cost that we have been absorbing since the start of the pandemic. We are grateful to our customers for understanding our plights and agreeing to our proposed price re-alignment that will take place this year. We have also made considerable efforts such as streamlining our workforce, optimising our processes, and initiating continuous improvement projects to help boost profitability of this business unit. Based on some of the preliminary feedback from our customers, we expect business to pick up gradually from the second half of 2024 underpinned by higher utilisation rate of their new fabs in Singapore. CHAIRMAN’S MESSAGE (CONT’D)
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