ASM Technologies - Engineering innovation

Amazing details for RV forms and gears here.

imtex-8.pdf (2.7 MB)

Key points.

  1. Building high precision, large sized complex fixtures was our major core competency in the past. Recently our majority of income is generated from high precision, mid and small size fixtures for the electronics and semiconductor equipment industries.

  2. Exploring the possibility of starting operations in Mexico or USA in 2023-24.

  3. We have put up 3 plants in Guindy, chennai, we are now putting up a large fourth plant in sriperumbudur area, chennai. Here we are planning to add 100 machine capacity. This capacity will be mainly for electronics and semiconducor equipment industries.

Inference.

Rv forms had only two manufacturing units till recently as per our information , Now they are saying they have setup a third unit and planning for a large fourth unit. This may be in line with four phase expansion outlined in the AR -2022. We have not seen a growth in manufacturing revenue in line with these expansions. Company continue to do 15 cr revenue rate per annum while RM expense have increased substantially. Hopefully we might see growth in mfg revenue now onwards.

Happy and excited to know that company is saying majority of their income now comes from electronics and semiconductor segments. These are segments which offers high growth potential and having high entry barriers.

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This is an excellent video on semiconductor industry.

US investing in their manufacturing after a gap of 20 years, Re-shoring and Nearshoring should open up big opportunity for indian companies.

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I love this point that you highlighted. India is rapidly growing as a destination for manufacturing at all stages of the electronics industry value chain (ex: more iPhones being made in India), and Forms and Gears is smartly positioning itself to take advantage of this shift. Also geographically, they’re well situated to serve their clients well, as Tamil Nadu is an established (and growing) electronics manufacturing hub.

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https://www.bseindia.com/corporates/anndet_new.aspx?newsid=71797884-01df-4c98-ad04-ae1d1932635a

Poor results from Asm tech.

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I am waiting for the next quarter and AGM to update my thesis regarding ASM.

ASM Technologies (and by extension Forms and Gears) has a very strong footing in Tamil Nadu and Karnataka, and the Chennai to Bengaluru belt is turning into a robust electronics manufacturing hub, and they are primed to take advantage of the opportunities in these two states.

With a presence in Western India, with the new Pune office, I am expecting to hear about big client wins. If they do not have a good client roster in Western India by the time of the AGM, I will question the decision to set up an office there.

There are long lead times and long sales cycles for specialized equipment in the semiconductor industry. However, it has been about a year since the JV with Hind High Vacuum was launched, and I expect to see some traction by the time of the AGM as well.

To summarize, ASM is sitting on a goldmine of three opportunities: workholdings/fixtures for the electronics industry, a new catchment area in Western India, and a semiconductor industry that’s in the limelight. All that matters now is how they execute.

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