Our Growth
When you hit rock bottom, the only way to go is UP!
Aemulus’ CEO, Sang Beng shares our Comeback Story.
(Courtesy of The Edge)
Aemulus’ journey
has been on a smooth ride
for more than a decade ever since our inception.
We were on a steady inclination year after year, and nothing was holding us back. Of course, there were bumps along the way as we conquered the mountainous hike to carve our growing presence in the semiconductor industry, but we were never once brought to a halt.
Not until
our post-public listed days in 2019…
Sales were spiralling downwards rapidly. Things were going haywire and the future of semiconductor testers bearing Aemulus logo to be seen in China seemed bleak.
A tough decision had to be made – to close the loss-making operations in China or get to the roots of the underlying problem. It was not in my nature to give up, and so, the biggest housekeeping sweep begins.
Taking the bull
by the horns
We began crunching the data. The company had spent almost RM2 million on things like Sales and Marketing, travelling and Applications Engineering expenses in China alone, which was equivalent to what Aemulus spent for the rest of the world. Yet, revenue generated by the other parts of the world was 8 to 10 times more than what we made in China.
So,
what went wrong?
As a decision-maker, I realised that I needed to put my boots on the ground, look at things and talk to customers over there. I would never be able to understand what was going on otherwise, and to make the right choice for the company.
First, I appointed a sales agent to visit Aemulus’ customers in China and the feedback received was terrible. When customers had a problem, our team was unable to deal with it. The managers were rarely on-site and were trying to solve problems by logging in remotely, leading to poor-after-sales service and affected Aemulus’ reputation in China.
That’s when I decided to move our general manager from Taiwan who was then based in Malaysia back to Taiwan and equipped him with a new team for the operation in China. I then visited every customer to personally apologise and to start anew. I remained in China and Taiwan for a full three months, visiting customers and identifying opportunities.
A matter of perception
and positioning...
A joint venture with Tangren Microtelligence Co Ltd (linked to the largest foundry in China, Semiconductor Manufacturing International Corp) had been on the cards, but plans fell through. I made it my top priority to revive the opportunity.
The proposed joint venture was particularly important because it would mean Aemulus’ entire business in China would be handled by a local entity, which would lower barriers to entry and the cost of doing business in the country.
This
was the turning point.
In the final quarter of 2020, Aemulus teamed up with Tangren Microtelligence Co Ltd to form the 40:60 JV, named Tang Ming Sheng Shi (Jiashan) Technology Co Ltd (TMSS). Through the joint venture, Aemulus was repositioned to penetrate the complementary metal oxide semiconductor (CMOS) image sensor market in China.
Coming out from the dark
to shine even brighter
As reflected in Aemulus’ financial performance the following year, it did not take too long for the JV to bear fruit. The group returned to the black with a net profit of RM3.66 million in the first half ended March 31, 2021 (1HFY2021) from a net loss of RM4.73 million in 1HFY2020.
To put things into perspective, China contributed only 11% to our revenue of RM19.3 million in FY2020. But in 1HFY2021 alone, it made up 44% of our revenue of RM27.4 million, which was already more than our revenue for FY2020.
Moving forward, Aemulus will continue to diversify our customer base. We will be shifting our focus to move towards becoming an intellectual property (IP) powerhouse as it is what gives us the edge in China.
Funds are allocated to grow our R&D and to expand our capacity at Aemulus Base. The expansion will see an increase in production capacity by 50% by the end of the calendar year 2022 (which translates to an estimated revenue capacity of RM120 million).
From looking back to our journey so far, to looking ahead to the road in front of us, I truly believe nothing can stop Aemulus because we put our heart and soul into all that we do.