Mi Technovation's 2Q Profit More Than Triples on Stronger Demand and Higher Selling Prices

KUALA LUMPUR: Mi Technovation Bhd achieved its highest-ever second-quarter net profit of RM55.21 million in the three months ended June 30, 2026 (2QFY2026), as revenue surged 46.65% to a record high on stronger demand for its semiconductor products, amid improved average selling prices and a favourable product mix .

The Penang-based group, which is primarily involved in the design and manufacturing of semiconductor equipment and materials, also attributed the strong quarterly results to better operational efficiency and favourable foreign exchange rates, its bourse filing on Monday showed .

The latest quarterly earnings were more than three times the RM15.78 million it made in 2QFY2025, as revenue jumped to RM226.02 million from RM154.12 million . Net profit margin expanded to 24.4% from 10.2% .

For the first half of FY2026 (1HFY2026), Mi Technovation's net profit more than doubled to RM86.19 million from RM33.59 million a year earlier, as revenue grew 43.89% to RM393.78 million from RM273.67 million . No dividend was declared with the latest results .

Growth Drivers Across Business Units

The outstanding performance was underpinned by the strong momentum across the group's two core business segments: Semiconductor Equipment Business Unit (SEBU) and Semiconductor Material Business Unit (SMBU).

Semiconductor Equipment Business Unit (SEBU)
The equipment segment continues to benefit from sustained demand in key end-markets, including mobility and wearables, high-performance computing (HPC), and memory segments . The demand for advanced semiconductor manufacturing equipment is being fuelled by the ongoing digital transformation and the proliferation of AI-enabled devices, which require increasingly sophisticated chips and, consequently, more complex production equipment.

Semiconductor Material Business Unit (SMBU)
The materials business, which manufactures solder spheres a critical assembly and packaging material used in advanced semiconductor packaging has experienced exceptional growth this year . The company reported that sales volume for its solder ball business was up 35% year-on-year in the first quarter of FY2026 . Riding the increasing demand for memory and AI chips, the company has seen exceptional performance in this segment, with order backlogs extending to 4-6 weeks compared to 2-3 weeks previously .

In June 2026, Mi Technovation hosted a site visit to its solder ball plant in Tainan, Taiwan, showcasing its proprietary sphere production process and presenting its first Silicon Carbide (SiC) MOSFET wafer, called Vanda 1, which delivered encouraging performance . The Vanda 1 wafer has passed both 1.2 kV and 1.7 kV VDMOSFET targets under the single-channel design, and its performance is on par with industry peers under 6-inch wafer processing .

Future Growth Catalysts

Vanda 1 Commercialisation
The group's semiconductor technologies business is progressing with its chip design through the MiSE Taiwan Research Institute. The Vanda 1, 6-inch SiC MOSFET prototype wafer, completed its fabrication in June and had commenced with a series of reliability tests as planned in the second half of FY2026 .

Commercial production for Vanda 1 is targeted for 1Q 2027, after all reliability tests and certifications are completed, while Vanda 2's development is progressing as planned . Once its wafer is qualified, it will enter commercial production and proceed with 8-inch and 12-inch SiC wafer development, which could deliver higher yield and reduce chip costs by more than 25% .

Singapore Listing of SMBU
The solder ball business, which contributes more than 50% to the Group's bottom line, is en route to listing on the Singapore Stock Exchange's Mainboard by year-end . The proposed listing will involve the issuance of new shares and the sale of existing shares, resulting in Mi's stake being diluted to 72.6% . Public Investment Bank expects the listing of Mi Material Holding Pte Ltd market capitalisation to be in the range of RM1.8-2.2 billion .

Consolidation in Johor
Management also shared its plans to consolidate its Malaysian operations under one roof on a large plot of land in Johor . The new Senai plant is equivalent to approximately 30% of SMBU's existing Tainan plant capacity .

Market Reaction and Analyst Sentiment

Mi Technovation's share price surged on Tuesday to a new all-time high after the semiconductor equipment firm beat market expectations with its quarterly earnings . The stock climbed as much as RM1.42 or 29% to RM6.29 . The gain also added some RM1 billion to the Penang-based firm's value, bringing its market capitalisation above RM5 billion for the first time .

Analysts remain optimistic about the company's prospects. Public Investment Bank maintained its Outperform call with an unchanged target price of RM5.50 based on 35x FY27 earnings per share . The consensus target price from analysts tracked by Bloomberg stands at RM5.52, with 5 Buy calls and no Hold or Sell recommendations .

Outlook

Looking ahead, the group expects the momentum in both its semiconductor equipment and semiconductor material business units to carry into the second half of the year . Growth in the semiconductor equipment business will be driven by sustained demand in mobility and wearables, and high-performance computing (HPC) and memory segments. These same segments together with automotive and renewable energy sectors, are expected to fuel its semiconductor material business .

Based on the current business outlook, MI Technovation expects the positive momentum to continue into the second half of FY2026, primarily supported by sustained demand from the mobility and wearables, as well as the high-performance computing and memory segments . The company stated that the demand outlook is set to strengthen even further in the second half of FY2026 compared to the first half, and management is highly confident and enthusiastic about delivering an exceptional, standout performance in FY2026 .

However, the group remains attentive to prevailing macroeconomic, geopolitical and supply chain dynamics that could affect the momentum . The broader semiconductor industry continues to face challenges from geopolitical tensions, supply chain disruptions, and the cyclical nature of the industry. Nevertheless, MI Technovation's diversified business model, strong order backlog, and promising new product developments position it well to navigate these challenges and capitalise on the growing demand for advanced semiconductor solutions .

Mi Technovation's record-breaking quarterly performance underscores the robust demand for semiconductor products and the group's ability to capitalise on favourable market conditions. With sustained growth expected across its business units, the group is well-positioned to continue its upward trajectory in the coming quarters. Its progress in chip design and electric powertrain development also points to a promising future as it expands into higher-value segments of the semiconductor and automotive industries .

Investors will be closely watching the commercialisation of Vanda 1 and the group's ability to maintain its momentum amid global market uncertainties. For now, the outlook remains positive, and the group appears on track to deliver another strong performance for the full year, reaffirming its position as one of Malaysia's leading semiconductor solutions providers.