Operations Review

Extracted from Annual Report 2017

NORTH ASIA

Mobile and Computing

Telecommunications providers in China have accelerated the deployment of 5G networks nationwide, which is expected to be fully operational to the public in 2019. We see this transformation this year, and we have been tapping on this opportunity with our products and applications.

Consumer

Driven by the demand for a quality lifestyle, consumers today are embracing wireless technology in their lives, whether at work or at home. We have identified a demand for true wireless stereo headsets and smart speakers with voice activation functions, and have been working to supply solutions and applications in these areas. In addition, we continue to see the demand for wearable devices, which uses our solutions.

Industrial and Instrumentation

We continue to see growth in this segment stemming from the rise of infrastructure projects related to IoT and Industry 4.0 (term used to indicate automation in manufacturing technologies). With more power solutions and battery management solutions from our suppliers, we believe this segment will remain one of the key drivers of our revenue growth, and we remain focused on capturing opportunities relating to this segment.

Lighting

This segment is closely related to the infrastructure developments in the region. Our strong portfolio in this area gives us the edge to participate in the projects. In particular, we see demand for our light emitting diode ("LED") drivers and lighting modules, as well as ultra violet LED for sterilisation.

Operations Review

SOUTHEAST ASIA AND INDIA

Mobile and Computing

In India, we foresee a strong and increasing demand in the mobile phone segment, as many smartphone brands have set up manufacturing plants in India and are adopting the use of local Printed Circuit Board Assembly processes and technology. We also see the exponential growth of the infrastructure of data centres to cater to demands fuelled by the Digital India initiative and cloud computing growth.

Southeast Asian manufacturers have also hopped on the mobile phone bandwagon to produce unique and functional mobile phones and carve out a niche for themselves.

Industrial and Instrumentation

We see a tremendous potential that will remain strong over the next couple of years, given the recent tenders for smart meters in emerging markets where we operate. As we gear towards IoT-oriented applications, there will be an increasing need for sensors in Southeast Asia in this segment.

> E-Government

In India, we continue to see strong demand and application of smart cards for banking and transportation purposes. We are also expecting the growth of a new area, E-Passport, in 2018. In Southeast Asia, with more nations gearing towards technology, we work closely with our suppliers to partake in various e-government projects in this region.

Lighting

The lighting segment has stabilised over the years in India. In addition to LEDs and driver integrated circuits, we have increased our Bill of Materials share through multilayered ceramic chip capacitors and passive components.

RISING SEGMENTS

The communications segment is also another potential growth driver. With the importance of communication modules due to the advent of IoT across the globe, we see the need for Narrowband-IoT applications. This is a growing area for both North Asia and Southeast Asia.

We have also seen the rise in the automotive segment due to the push for smart cars and automated vehicles. With the India government's push for e-vehicles and release of new tenders, we see a strong automotive market in 2018, particularly in the two-wheeled, three-wheeled and four-wheeled vehicle segments.

NEW PRODUCT LINES

To expand our product range in Southeast Asia, we signed partnerships with Paratech (for its 3D force pressure touch sensing solution) and Sensitron (for its highly reliable power electronics) in 2017. These product lines will give us an edge due to the increasing demand for sensors and power-related applications.

Operations Review