KUALA LUMPUR: Mi Technovation Bhd is poised to enter a new business cycle for both smartphones and personal computers (PCs), as the evolving development of artificial intelligence (AI) is set to positively impact both segments.
Public Investment Bank Bhd (PublicInvest) said the group's semiconductor material business unit (SMBU) segment is also expected to benefit from higher demand for smaller solder balls in tandem with smaller chip packaging.
The firm added that, in view of intensifying geopolitical tensions, the group plans to set up a third SMBU operation outside of China and Taiwan to diversify the risk exposure.
"Management indicated that Malaysia will be the priority for the new set-up as it wants to be closer to its existing customers.
"At present, capacity utilisation of its plant in Taiwan remains at 60 per cent, while Accurus China, which is expected to reach breakeven by 2026, has a capacity utilisation of below 20 per cent," it said in a note.
Meanwhile, PublicInvest said the group's flagship product, the Mi Series wafer-level chip scale packaging die sorting machine, is experiencing a gradual uptick in demand from the mobility and wearable segments, driven by Taiwan and Southeast Asian regions.
Mi Technovation highlighted that the semiconductor equipment business unit (SEBU) is set to see new contributions coming from the high-performance computing (HPC) and memory segments in the next two to three years.
Going forward, PublicInvest said the group is poised to capitalise on the AI boom, particularly through LAB machines, copper core solder balls, and advanced multiple bin sorting machines.
These key products are expected to directly benefit from increased global spending on AI technological development.
Meanwhile, the first noted that its mobility and wearables (smartphones, 5G, and the internet of everything) segments will see robust growth once the replacement cycle kicks in as more advanced AI smartphones and AI PCs are introduced.
PublicInvest has maintained an "outperform" call on Mi Technovation, with a higher target price of RM2.92.