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Unisem (M) Berhad’s short-term outlook is cautious. Revenue is growing, but profits fell sharply due to margin pressure and higher costs. Management expects a recovery as new Malaysian facilities ramp up, with modest growth guidance ahead. Analysts are mixed: some see upside (RHB target RM 3.04, ~27% gain), but consensus is bearish with average targets around RM 1.73–1.78, implying downside. Key risks include high expenses, weak margins, and trade uncertainties.
Unisem (M) Berhad is a leading Malaysian semiconductor company specializing in packaging and testing services. It serves global chipmakers with advanced assembly solutions. The company benefits from growing demand for semiconductors worldwide. Its stock reflects industry trends and shows steady growth potential due to strong customer relationships and technological expertise.
Over the past six years, Unisem (M) Berhad has evolved from a cost-focused OSAT player into a technology-driven, sustainability-aligned enterprise.
This transformation involved embedding ESG principles and digitalisation into its operations, expanding its role to a collaborative innovation partner, and investing in modern, environmentally sustainable facilities.
Despite this strategic shift, there was no sustained uptrend in profits from continuing operations. While profit after tax in 2022 was approximately three times higher than in 2019, by 2024 it had declined to a level below that of 2019.
Operationally, there was little improvement in profit margins over the six-year period, although the Selling, General and Administrative margin remained stable. As a result, ROE declined at 12 % per year compounded over the period.
According to the company, this performance stems primarily from cyclical demand weakness, underutilised capacity, and cost escalations. These challenges have masked the operational improvements and technology investments the company has made.
However, its capacity investments, customer alignment, and cost control suggest it is well-positioned to rebound once demand normalizes.
To track Unisem’s recovery, investors should watch for rising semiconductor demand and improved plant utilisation. Margin and ROE improvement would signal better cost absorption and capital efficiency. New customer wins and progress on technology and ESG goals would further support a sustainable rebound.
