OVERVIEW OF FY2023 BUSINESS ENVIRONMENT According to research published by Gartner in January 2024, the global semiconductor market contracted by 11% in 20231, with the decline precipitated by weaker-than-expected demand and high inventory levels within the memory segment, which includes smartphones and personal computers (“PCs”). The non-memory market exhibited greater resilience, with this sector including the aerospace industry and emerging applications such as electric vehicles (“EVs”), which are growing in demand. FY2023 FOCUS AREAS & PRIORITIES • Maintaining our strength in core, memory sector products (i.e., consumer electronic devices) • Investing in emerging technologies such as MEMS and Silicon Photonics, which offer higher average selling prices (“ASP”) and margins, with applications in EVs, 5G telecommunications, artificial intelligence (“AI”) and other growing technology areas • Undertook ongoing product testing and qualifications with global customers • Onboarded several new customers from the AI and EV sectors • Completed capacity expansion to meet future demand growth OUTLOOK & PROSPECTS The global semiconductor market is expected to bounce back strongly in 2024, with the Semiconductor Industry Association predicting 13.1% growth to USD588.4 billion in global sales2, fuelled largely by anticipated growth of over 40% in the memory sector due to the normalisation of inventory levels. We also foresee growth in demand from emerging technology sectors such as AI and high-performance computing (“HPC”), and we have already witnessed increased interest from customers in these areas. This validates our proactive efforts to expand our capacity and undertake product testing and qualification activities with our customers. To capitalise on our potential, we will double down on efforts to attract high quality customers requiring solutions in Silicon Photonics, while simultaneously investing to establish a specialised team that can enhance our Silicon Photonics capabilities. Moreover, we will seek to initiate a fast-tracked qualification process for products in emerging technology sectors to improve speed-to-market. Sources: 1. Gartner, Gartner Says Worldwide Semiconductor Revenue Declined 11% in 2023 - https://www.gartner.com/en/newsroom/pressreleases/2024-01-16-gartner-says-worldwide-semiconductor-revenue-declined-11-percent-in-2023 2. Semiconductor Industry Association, Global Semiconductor Sales Increase 3.9% Month-to-Month in October; Annual Sales Projected to Increase 13.1% in 2024 - https://www.semiconductors.org/global-semiconductor-sales-increase-3-9-month-to-month-in-october-annualsales-projected-to-increase-13-1-in-2024 Integrated Report 2023 83
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