BUSINESS REVIEW: SEMICONDUCTOR STRATEGIC FOCUS GOING FORWARD The global semiconductor landscape is shifting towards specialised and higher-value applications. The Group is repositioning the segment to compete on differentiation rather than volume. The Semiconductor segment is being positioned as a solutions-driven foundry supporting critical applications such as artificial intelligence, data centres and advanced industrial use cases. The product portfolio is being refined to reduce exposure to commoditised production and concentrate on technologies offering stronger pricing resilience and longer-term relevance. This includes expanding capability in more complex wafer processing and supporting applications requiring higher precision and customisation. Operational priorities include restoring production stability and improving utilisation levels following the disruption during the year. Efforts target stronger resilience and reduced risk of recurrence. Improvements in process control, production planning and coordination aim to deliver more consistent output and closer alignment with customer demand. The Semiconductor segment will continue to deepen engagement with customers and technology partners to support capability development and shorten time-to-market for new applications. These actions position the segment to capture opportunities arising from structural shifts in the semiconductor industry and improve its competitive standing over time. Challenges The segment is exposed to supply chain disruptions and geopolitical developments that may affect the availability and cost of key materials, components and equipment. Changes in trade policies, tariffs or restrictions may also impact procurement and operational continuity. Mitigation The Group continues to diversify its supplier base, strengthen supply chain planning and monitor geopolitical developments to mitigate potential disruptions and maintain operational resilience. Supply Chain and Geopolitical Risk Key Focus Areas • Product Mix Enhancement Increase exposure to specialised applications such as artificial intelligence, data centres and advanced industrial use cases to improve margins. • Capacity Optimisation and Utilisation Improvement Align production planning to customer demand to improve utilisation levels and achieve more stable output. • Process Capability and Technology Development Invest in process capability upgrades and specialised semiconductor solutions to compete in higher-value segments. • Customer Engagement and Market Positioning Deepen relationships with key customers and expand participation in high-growth segments. • Operational Efficiency and Cost Discipline Maintain cost control and operational efficiency to improve margins and align resources to strategic priorities. SilTerra is set to compete on differentiations rather than volume. DNeX INTEGRATED REPORT 2025 56 ABOUT THIS REPORT LEADERSHIP VALUE CREATION @DNeX LEADERSHIP INSIGHTS OVERVIEW OF DAGANG NeXCHANGE BERHAD
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