BUSINESS REVIEW: SEMICONDUCTOR FINANCIAL PERFORMANCE Semiconductor segment recorded revenue growth in FY2025, supported by 33% increase in average selling prices per wafer. This is contributed by stronger product mix, with revenue contribution from Emerging Technology products increasing significantly to 43% compared to 23% in FY2024. The segment reported an LBT, which included a non-cash impairment of RM200.2 million. Excluding this impairment, core LBT of RM104.6 million (FY2024: RM75.5 million), was primarily attributable to a temporary power disruption at the Kulim Hi-Tech Park, partially mitigated by improved margins from higher-value products. KEY INITIATIVES AND DEVELOPMENTS Operating performance during the year was affected by a power disruption at Kulim Hi-Tech Park, which reduced production and shipment volumes. The Group focused on restoring production stability, improving utilisation levels and strengthening coordination across production processes. Efforts targeted process efficiency, closer engagement with customers and tighter alignment of production schedules to demand. The segment continued to build capability in higher-value applications, with emphasis on process improvements and development of specialised semiconductor solutions to support higher-margin products. Challenges The Semiconductor segment operates within a cyclical industry environment, where fluctuations in global demand may affect wafer volumes, utilisation levels and pricing. Periods of weaker demand, particularly during industry downturns or inventory correction cycles, may result in lower capacity utilisation and margin compression, affecting overall segment performance. Challenges The segment is exposed to operational risks arising from infrastructure reliability and production continuity. Disruptions such as power outages or facility-related issues may affect production output, shipment schedules and customer delivery commitments. Such events may also lead to temporary inefficiencies and increased operating costs. Challenges The Semiconductor segment operates in a technology-driven industry characterised by rapid innovation and evolving customer requirements. Failure to keep pace with technological change may affect competitiveness, particularly in higher-value and specialised semiconductor segments, and limit growth opportunities. Mitigation The Group continues to strengthen its product mix by increasing the proportion of higher-value and specialised applications, which are generally less sensitive to volume-driven cycles. Production planning is aligned more closely with customer demand to optimise utilisation levels, while ongoing engagement with customers supports better visibility of order patterns. Continued focus on cost discipline and operational efficiency also supports margin management during weaker demand periods. Mitigation Mitigation measures include strengthening operational resilience through enhanced coordination with infrastructure providers and implementation of contingency planning measures. Production scheduling and operational processes are refined to improve flexibility and responsiveness in the event of disruptions. Ongoing efforts to improve process efficiency and operational discipline also support more stable production performance. Mitigation The Group continues to invest in process capability upgrades and development of specialised semiconductor solutions, with focus on higher-value applications such as artificial intelligence, data centres and advanced industrial use cases. Strategic focus on capability development and customer alignment supports the segment’s ability to remain competitive and capture emerging opportunities. Operational Disruption and Production Continuity Risk Technology Competitiveness Risk RISKS AND MITIGATION Cyclical Demand and Utilisation Risk 55 OPERATIONAL REVIEW SUSTAINABILITY STATEMENT GOVERNANCE FINANCIAL STATEMENTS SHAREHOLDERS’ INFORMATION INTELLIGENCE POWERING
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