Coraza accelerates capacity expansion as the semiconductor equipment cycle strengthens

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Coraza expands semiconductor capacity

Highlights

Coraza is expanding capacity with six factories, with total floor space increasing fourfold to 415,000 sq ft to support growth in the semiconductor industry.
First-half FY2026 revenue rose 21.5% to RM95.18 million, while second-quarter net profit increased to RM5.43 million from RM3.19 million a year earlier.
RHB Research forecasts Coraza's revenue to rise to RM213 million in FY2026 and RM285 million in FY2027, with its share price more than doubling to RM1.06 since the start of the year.

This article was translated from the original. Read the original version by our correspondent here.

Capacity investments drive new growth

As reported by The Edge Malaysia, Coraza is capitalising on a new upcycle in the semiconductor industry after moving up the value chain, according to managing director Lim Teik Hoe. He said the company supplies fabrication components to fab equipment makers and now supports a broader ecosystem within semiconductor equipment.

During the previous downturn, which lasted less than three years, Coraza doubled its capital expenditure on machinery and equipment. The company added more advanced machines and developed new manufacturing processes to produce larger and more complex components with increasingly tighter tolerances.

Coraza, which has more than 900 employees and currently operates two shifts with some staff working overtime, said its customers, mostly multinational companies, are providing strong visibility through 2027. Its current order book stands at RM170 million, while customers' rolling six- to 12-month forecasts have become more positive since the start of this year, providing greater visibility for planning and procurement of specialised materials with long lead times.

Since 2023, the company has added five factories, bringing its total facilities to six, comprising three owned facilities in Nibong Tebal, Penang, and three leased facilities in Kulim, Kedah. Total floor space has expanded more than fourfold from 93,000 sq ft to 415,000 sq ft, and the latest facility, P6, which is expected to be taken over this month, will add approximately another 90,000 sq ft.

Lim said the expanded capacity could support a growth trajectory of 30% to 40%. Beyond additional floor space, the company is also adapting its manufacturing layout and processes to handle larger and heavier components, while assessing an expansion of its surface finishing capabilities to meet changes in product mix.

Financial performance and sector outlook

The expansion of its capabilities and capacity has already translated into stronger financial performance. For the second quarter ended 30 June 2026, Coraza posted record quarterly revenue of RM51.05 million, compared with RM42.49 million a year earlier, while first-half FY2026 revenue rose 21.5% to RM95.18 million from RM78.3 million in the corresponding period of FY2025.

Quarterly net profit rose to RM5.43 million from RM3.19 million, while first-half net profit surged 66.3% year-on-year to RM9.78 million from RM5.88 million. Lim said he is optimistic that Coraza's annual earnings will reach a new high in FY2026 and that growth momentum will continue into FY2027.

RHB Research projects revenue of RM213 million in FY2026 and RM285 million in FY2027, compared with RM160 million in FY2025. The research firm expects net profit to grow to RM22 million in FY2026 and RM30 million in FY2027, from RM15 million in FY2025.

The need to fund continued expansion is also shaping the company's capital allocation, with management prioritising reinvestment over dividend payments. Coraza has not paid a dividend since its listing in 2022 and has spent RM125 million on net additions to property, plant and equipment over the past four years; at the end of June, the group had RM47.22 million in cash against RM49.43 million in borrowings, with a net gearing ratio of 4.4%.

At the same time, Coraza sees opportunities in metrology, inspection and advanced packaging equipment, as increasingly complex semiconductor processes require more sophisticated equipment and components. The company's share price more than doubled to RM1.06 last Wednesday from 54 sen at the start of the year, giving it a market capitalisation of RM526.23 million, with the stock trading at a forward price-to-earnings ratio of around 24.2 times.

Our previous coverage of MOSTI's RM1.29 billion allocation in Budget 2027 highlighted how the funds are being channelled to accelerate the development of high-value technologies, including semiconductors and artificial intelligence. We also outlined initiatives such as SemiconStart and SUPER 2.0 to expand the startup ecosystem, R&D commercialisation and the creation of high-value jobs that support the local technology supply chain.

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