Micro-Mechanics (Holdings) has reported earnings of $9.1 million for its 1HFY21 ended Dec 31 2020, up 33% y-o-y. 

Revenue, in the same period, was up 16.7% y-o0y to $36.9 million, thanks to “buoyant” conditions in the worldwide semiconductor industry

For the three months ended Dec 31 2020, the company’s earnings jumped 24.6% y-o-y to $4.5 million on the back of a 15.2% y-o-y rise in revenue to $18.7 million.
“Despite ongoing headwinds from the COVID-19 pandemic, the Group continued to benefit from positive semiconductor industry conditions to deliver record revenue
and profit in 1H21,” says CEO of Micro-Mechanics, Chris Borch.

“We witnessed higher sales in the majority of our geographical markets, with double-digit growth in our top three markets of China, the USA and Malaysia,” he adds.

Shareholders can look forward to a higher interim dividend of 6 cents per share, up 20% from 5 cents per share paid in the year earlier period.

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“In addition to reflecting our confidence in the group’s long-term prospects, we hope our commitment to shareholder returns will be helpful to shareholders during this difficult period,” says Borch.

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He sees the industry may be entering into a “supercycle” of multi-year growth, thanks to higher demand for computers, mobile devices and the need for massive data centres as well as the proliferation of applications for chips.

World Semiconductor Trade Statistics expects the global semiconductor market to have increased 5.1% to US$433 billion in 2020 and forecasts it will grow another 8.4% to US$469 billion in 2021.

Borch expects the industry’s annual revenue to accelerate to hit double digits and the US$1 trillion mark to be attained in seven years’ time.

In order to be better positioned to capture this growth, the company has sped up its capital investments, with an increase of $5.3 million in the six months to Dec 2020.

Among others, Micro-Mechanics is developing a new machining technology at a factory in US.

“We believe this new machining technology will be essential for making the next-generation of parts for wafer-processing equipment that are designed to fabricate chips with geometries measuring well below 10 nano-meters,” says Borch. 

At 4.12 pm, Micro-Mechanics' share price dropped 2.14% to trade at $3.65.