UMS Holdings

[Boon]

From page 6 of AR2014:

“During FY2014, UMS had invested approximately S$6.7 million to replace older machinery and this amount is within its long term capital expenditure budget. The Group do not foresee any major capital expenditure in the next few years as it has ample capacity for growth. Additionally, UMS’ current set of equipment and machinery are still technologically relevant to support the next phase of growth in the global semiconductor equipment market.”

No major capex + no bank borrowing (no interest expense) => all FCF generated from operations is available to Equity. 

[CityFarmer]

From page 6 of AR2014:

“During FY2014, UMS had invested approximately S$6.7 million to replace older machinery and this amount is within its long term capital expenditure budget. The Group do not foresee any major capital expenditure in the next few years as it has ample capacity for growth. Additionally, UMS’ current set of equipment and machinery are still technologically relevant to support the next phase of growth in the global semiconductor equipment market.”

No major capex + no bank borrowing (no interest expense) => all FCF generated from operations is available to Equity. 

The capacity has expanded with the Penang plant in full operation, since 2013. The expanded capacity wasn't utilized, based on the FY2014 sales. There are much more room for growth, and margin improvement with the Penang plant lower operation costs, IMO

To add-on with numbers. In the last 2 quarter report in FY2015, the average PPE purchases was S$0.3 million, while the average per quarter in FY2014, was S$1.7 million.

(vested)

[Boon]

Korean chipmaker SK Hynix announces $38bn investment in 3 new plants

By Jerin Mathew
August 25, 2015 

http://www.ibtimes.co.uk/korean-chipmake...ts-1516912
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TSMC Wins Lawsuit Against Ex-Employee Now at Samsung
'He has to quit working for Samsung,' says TSMC

Alan Patterson

8/25/2015

http://www.eetimes.com/document.asp?doc_id=1327515

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TSMC growing its 16nm client base

Josephine Lien, Taipei; Jessie Shen, DIGITIMES [Monday 24 August 2015]

http://www.digitimes.com/news/a20150824PD205.html

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[ethys]

(1) "The relocation to its Penang plant is expected to complete in the near future. The Malaysian facility, together with the weakening Ringgit, allows the Group to enjoy lower operational costs which put it in a good position to maintain its low cost competitive edge"

It is good to hear that the proportion of their cost in ringgit will increase. I could not see anywhere in their financial reports the breakdown of their costs by currency and/or by company departments. Is it somewhere?

(2) "Singapore continues to remain as the Group’s biggest market, contributing S$16.6 million in 2Q2015 compared to
S$16.3 million a year ago. Revenue from Others remained relatively stable at S$7.0 million in 2Q2015 (2Q2014: S$7.1
million) while revenue contribution from the US experienced a 44% increase from S$5.2 million in 2Q2014 to S$7.5
million in 2Q2015 as a result of higher component sales"

Ok so that's a bit more than 50% of their revenue in Singapore and almost 25% in US. But we know AMAT who is a US company is almost their only client so one thing I am trying to figure out is whether UMS bills everything to AMAT in USD regardless of the Country where UMS is selling or if they are selling in local currencies. Does anyone know that?


I am hoping that they are tending towards 100% of their cost in Ringgit and that 100% of their revenue is in USD. That would be a double win for UMS right now.

(vested)

[BlueKelah]

Dun be too concern with currency fluctution, so long semicon sector holds steady, ums will continue to bring in the cash.

sent from my Galaxy Tab S

[ethys]

Yes I do agree the main driver for UMS is the macro with the semicon sector (and obviously the micro with AMAT-UMS partnership...).
I didn't care so much about the currencies with UMS until recently tho I have been vested for years but with the recent currency movements I became more curious about this as this will likely have a material impact for the coming quarters, hopefully positive but to which extent?! Haha I am just being a bit greedy and starting to hope for a dividend higher than 6c for next year but this is way too soon to say and the FX fluctuations will not matter so much indeed long term wise.

<vested>

[CityFarmer]

(1) "The relocation to its Penang plant is expected to complete in the near future. The Malaysian facility, together with the weakening Ringgit, allows the Group to enjoy lower operational costs which put it in a good position to maintain its low cost competitive edge"

It is good to hear that the proportion of their cost in ringgit will increase. I could not see anywhere in their financial reports the breakdown of their costs by currency and/or by company departments. Is it somewhere?

(2) "Singapore continues to remain as the Group’s biggest market, contributing S$16.6 million in 2Q2015 compared to
S$16.3 million a year ago. Revenue from Others remained relatively stable at S$7.0 million in 2Q2015 (2Q2014: S$7.1
million) while revenue contribution from the US experienced a 44% increase from S$5.2 million in 2Q2014 to S$7.5
million in 2Q2015 as a result of higher component sales"

Ok so that's a bit more than 50% of their revenue in Singapore and almost 25% in US. But we know AMAT who is a US company is almost their only client so one thing I am trying to figure out is whether UMS bills everything to AMAT in USD regardless of the Country where UMS is selling or if they are selling in local currencies. Does anyone know that?


I am hoping that they are tending towards 100% of their cost in Ringgit and that 100% of their revenue is in USD. That would be a double win for UMS right now.

(vested)

Based on the receivables info, from page 80 of AR 2014, the sales were mostly done in two currencies, SGD, and USD, with an very primitive estimation of 20%:80% ratio. I am speculating that, the sales in Singapore, are partly in SGD, and partly in USD, while US sales are in USD. The Penang plant is mainly supporting Singapore biz, with very minimum MYR sales.

(vested, and sharing few quick findings and speculations)

[Boon]

Dun be too concern with currency fluctution, so long semicon sector holds steady, ums will continue to bring in the cash.

sent from my Galaxy Tab S

UMS is exposed to FX risk - predominantly in USD/SGD - hence, there is reason to be concern IMO.

[valuebuddies]

with the cheaper ringgit and more expensive dollars, I think UMS is benefiting from the currency fluctuation now

[Boon]

Global Semiconductor Sales Down Slightly in July

SOFTENING DEMAND, CURRENCKY DEVALUATION LEAD TO SLOWER SALES

Published Thursday, September 3, 2015 6:00 pm
by Dan Rosso

WASHINGTON—Sept. 3, 2015—The Semiconductor Industry Association (SIA), representing U.S. leadership in semiconductor manufacturing, design, and research, today announced worldwide sales of semiconductors were $27.9 billion for the month of July 2015, a decrease of 0.9 percent from July 2014 when sales were $28.1 billion. Global sales from July 2015 were 0.4 percent lower than the June 2015 total of $28.0 billion. Regionally, sales in the Americas were roughly flat in July compared to last year, while sales in China increased by nearly 6 percent. All monthly sales numbers are compiled by the World Semiconductor Trade Statistics (WSTS) organization and represent a three-month moving average.  

“Global semiconductor sales have slowed somewhat this summer in part due to softening demand, normal market cyclicality, and currency devaluation in some regional markets,” said John Neuffer, president and CEO, Semiconductor Industry Association. “Despite these headwinds, year-to-date global sales through July are higher than at the same time last year, which was a record year for semiconductor revenues.”

Regionally, year-to-year sales increased in China (5.6 percent), Asia Pacific/All Other (1.0 percent), and the Americas (0.8 percent), but decreased in Europe (-12.5 percent) and Japan (-13.3 percent), in part due to currency devaluation. On a month-to-month basis, sales increased in Japan (2.7 percent), China (0.6 percent), and Europe (0.4 percent), but fell slightly in the Americas (-0.3 percent) and Asia Pacific/All Other (-2.5 percent). 

“One key facilitator of continued strength in the U.S. semiconductor industry is research, the lifeblood of innovation,” Neuffer said. “SIA and Semiconductor Research Corporation this week released a report highlighting the urgent need for research investments to advance the burgeoning Internet of Things and develop other cutting-edge, semiconductor-driven innovations. Implementing the recommendations in the report will help the United States harness new technologies and remain the world’s top innovator.” 

To find out how to purchase the WSTS Subscription Package, which includes comprehensive monthly semiconductor sales data and detailed WSTS Forecasts, please visit http://www.semiconductors.org/industry_statistics/wsts_subscription_package/.    

July 2015 chart and graph 

http://www.semiconductors.org/news/2015/...y_in_july/

(vested)