FRONTKEN CORPORATION BERHAD 200401012517 (651020-T) ANNUAL REPORT 2024 13 BUSINESS OVERVIEW Semiconductor The global semiconductor industry experienced a recordbreaking year in 2024, with total sales reaching US$627.6 billion, marking a 19.1% increase from US$526.8 billion in 2023, as reported by the Semiconductor Industry Association (“SIA”). According to SIA President and CEO John Neuffer, this milestone represents the industry’s highest-ever annual sales, surpassing the US$600 billion mark for the first time, with double-digit growth projected for 2025. Semiconductors remain the foundation of modern technology, powering innovations in AI, generative AI, communications, medical devices, advanced transportation and defence applications1. For the Group, we witnessed a similar trend with our semiconductor business achieving solid year-on-year growth. Throughout the year, our R&D team worked closely with customers to support their advancements in leadingedge semiconductor technology. As chip evolves to smaller technology nodes, demand for high-precision chamber process parts cleaning has become increasingly stringent, making near-zero particle contamination more critical than ever. Therefore, ensuring the highest quality standards is crucial. We continued to enhance quality control through advanced metrology systems and automated data analytics to maintain exceptional process reliability. At the same time, we are continuously exploring new innovations and enhance existing processes, including in the area of ESG, where we integrate more environmentally friendly materials and automate some key steps of our operations. The advanced precision cleaning process is intricate, involving 50 - 60 meticulous steps for each component. As always, our processes continue to evolve to keep up with our customers’ demand. To improve productivity and cost-effectiveness, we made incremental improvement in our workflows, leading to higher efficiency and optimised performance. Additionally, we collaborate with customers in their innovation journeys, applying new methodologies and developing customised solutions to support their technological roadmaps. The Group has built a strong presence in major semiconductor markets including Taiwan, Singapore, and Malaysia. Moving forward, we will continue to strengthen our position in these markets by expanding capacity organically to meet the rising demand. Simultaneously, we remain committed to investing in R&D, particularly in automation and advanced cleaning technologies, to further enhance throughput and efficiency. As we strive to become the global leading service provider in semiconductor surface treatment/precision cleaning, we have to explore new strategic markets. The United States, a key semiconductor innovation hub, presents a compelling opportunity as major semiconductor companies scale up their manufacturing capacities there. Similarly, Europe’s semiconductor sector is also evolving rapidly under the European Chips Act, making it an attractive market for our services. Japan, home to some of the largest chip manufacturers, remains another key region for expansion. To that end, we are actively pursuing opportunities with strategic partners for potential collaboration in the markets where we do not yet have a physical presence. Should these discussions materialise, it will provide direct access to these new markets and thus strengthen our global footprint. We will continue to keep our shareholders updated on these developments through official company announcements. An employee in the chemical lab An employee putting a fixture into the oven Engineering 22% 78% Semiconductor Revenue in (%) in FY2024 CHAIRMAN’S MESSAGE (CONT’D) Source: 1 From SIA website
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