Globetronics’ CEO Change Sparks Talk of a Shift Towards AI Ambitions?

Globetronics Technology Bhd (KLSE: GTRONIC), a well-known name in Malaysia’s semiconductor scene, is undergoing a leadership shake-up that has caught some attention.

CEO Heng Charng Yee and Executive Director Kang Wei Luen are stepping down, with Heng wrapping up her tenure at the end of this year and Kang leaving immediately. According to filings with Bursa Malaysia, both exits are due to personal matters and other commitments. Filling the CEO seat will be Chief Operating Officer Yip Wai Chee, who’ll take charge starting 2 January 2025.

This leadership transition comes at a potentially pivotal time for Globetronics, which specialises in outsourced semiconductor assembly and testing (OSAT). Rumour has it that the company might be pivoting towards developing AI-related integrated circuit (IC) services, possibly in partnership with a Taiwanese firm. With Yip’s background, this speculation seems more credible. He’s been instrumental in automating production lines and has experience in product ramp-ups and qualifications, not to mention his time at Intel Penang. His appointment could hint at a shift towards more advanced automation and AI-driven initiatives for Globetronics.

For nearly three decades, Globetronics has been a key player in Malaysia’s semiconductor ecosystem, focusing primarily on OSAT services. The potential move into AI could represent a fresh chapter for the company, possibly making it more competitive and opening up new revenue streams. With AI rapidly shaping industries worldwide, this could be a smart direction for the company under Yip’s leadership.

It hasn’t been all smooth sailing lately, though. In September, Globetronics’ share price took a 32.5% dive following the sudden resignation of its auditor, KPMG PLT. The timing was less than ideal, as big institutional players like the Employees Provident Fund and Lembaga Tabung Haji offloaded their shares, no longer qualifying as substantial shareholders. This naturally drew some unease, especially as KPMG was the auditor involved in Serba Dinamik’s 2021 accounting scandal. However, Executive Chairman Kent Liaw Way Gian quickly stepped in to reassure investors, stating that Globetronics’ operations were solid and there were no financial discrepancies. Liaw also mentioned that the company is heading into a new capital expenditure cycle, which could affect its dividend payouts in the near term.

Despite recent bumps, RHB is maintaining a positive outlook for Globetronics, setting a fair value of RM0.68 per share — suggesting significant upside potential from its current price, which is trading at a discount. Analysts believe that Globetronics’ strong foundations in automated assembly and testing, paired with potential AI collaborations, could drive future growth.

The big question now is whether Yip’s appointment signals the beginning of a real transformation for Globetronics. If the rumoured AI strategy takes off, it could mean a whole new direction for the company, helping it transition from a traditional OSAT player to an AI-driven tech contender. As the semiconductor industry increasingly embraces AI applications, all eyes will be on how Globetronics navigates this change under its new leadership. It’s an exciting time for the company, and investors will be keen to see if the bold moves pay off.