This article first appeared in The Edge Malaysia Weekly on July 27, 2026 - August 2, 2026

PENTAMASTER Corp Bhd’s (KL:PENTA) co-founder and group executive chairman Datuk Chuah Choon Bin is candid about the opportunity the group almost missed.

While the Penang-based automation specialist was riding the silicon carbide and electric vehicle investment wave four years ago, Taiwanese automated test equipment (ATE) makers were quietly embedding themselves in Taiwan Semiconductor Manufacturing Co’s (TSMC) advanced packaging ecosystem — a market that has become one of the biggest beneficiaries of the artificial intelligence (AI) boom.

“Taiwanese players started five years ago because they had the opportunity to work with TSMC. Their revenues have jumped significantly. Malaysians are a bit late,” Chuah, 65, tells The Edge.

Late, perhaps, but not absent.

Two years ago, Pentamaster began developing what Chuah calls the Samurai Series — a family of advanced packaging machines that spans the semiconductor manufacturing workflow, from wafer inspection, probing and electrical testing to silicon photonics testing, interposer inspection, substrate inspection, packaging and final system-level testing.

Four product lines have already been deployed as demonstration units for customers in Taiwan, Europe and Malaysia, while the first commercial deliveries are expected by the end of this year before ramping up more meaningfully in 2027.

The initiative marks a strategic pivot. Rather than relying on the conventional ATE and semiconductor handlers that built the group, Pentamaster is betting its next phase of growth on higher-margin, higher-precision systems serving the AI chip boom.

The strategic shift is as much about survival as it is about growth.

Conventional semiconductor handlers — the pick-and-place machines that were once Pentamaster’s bread and butter — have increasingly become a commodity business.

“China players sell at half the price they used to sell. It’s a very difficult, very competitive market,” says Chuah.

“An ATE company like us cannot just focus purely on pick-and-place. We need to venture into testing.”

Advanced packaging, by contrast, requires an entirely different class of equipment.

Whereas traditional machines operated at a positioning tolerance of around 100 microns, Pentamaster’s latest systems target precision down to five to 10 microns. They must also measure electrical signals at picoampere and nanoampere levels while actively dissipating heat generated during AI chip testing.

“The precision today is no longer just mechanical. You are talking about electrical signals, low-noise signals, pico, nano … everything is becoming smaller and much more precise,” Chuah explains.

The technological leap is reflected in the pricing.

A single advanced packaging machine typically sells at roughly 10 times the price of Pentamaster’s conventional equipment. The higher engineering complexity also translates into substantially better margins, even though Chuah declines to quantify the improvement.

Pentamaster’s optimism rests on the purchasing behaviour of its advanced packaging customers. Unlike conventional equipment, which is often bought incrementally, advanced packaging systems are deployed in fleets.

“For one series of machines, they usually buy at least 30 to 100. Every year, they are looking at about 50 to 100 machines. Over two to three years, maybe 300,” says Chuah.

On the Samurai products under development, Chuah says the company is “very confident” of six of them, each of which he believes can eventually sell at least 50 units annually once customer qualification is completed.

Four demonstration systems have already been installed — two in Taiwan, one in Europe and one at a leading semiconductor foundry in Malaysia for silicon photonics applications. The systems include system-level testers, chiplet testers and a proprietary three-dimensional X-ray inspection platform capable of imaging bonding quality layer by layer inside stacked 2.5D and 3D packages — something conventional two-dimensional inspection systems cannot achieve.

One Samurai platform has already entered the supply chain of “one of the big GPU and CPU customers”, Chuah reveals. The equipment is being qualified through substrate suppliers working directly with the chip designer. “This is already a done deal,” he adds.

AI-related applications now account for about 20% of Pentamaster’s order book, which stood at RM480 million at end-March.

Another emerging opportunity is multilayer ceramic capacitors (MLCCs) — passive components used extensively in AI servers and data centres. Equipment for MLCC manufacturing currently contributes only about 1% of group orders, but Chuah believes the contribution could rise to around 10% as global manufacturers search for additional equipment suppliers amid industry capacity constraints in the race to ramp up production.

The commercial opportunity underpins Chuah’s optimistic outlook for Pentamaster. The chairman, who has a master’s degree in electrical and electronics engineering from the University of Auckland in New Zealand, expects the group to deliver double-digit revenue growth for its financial year ending Dec 31, 2026 (FY2026).

He responds without hesitation when asked whether Pentamaster could surpass its previous record performance. “Yes, in FY2027 when orders are fully captured,” he says.

Asked whether margins could surpass the net margin of roughly 17% achieved during the group’s previous earnings peak, Chuah replies, “It will be better.”

The confidence comes after a challenging down cycle for the semiconductor equipment industry that saw Pentamaster record two consecutive years of declining earnings.

After posting record results in FY2023, with revenue of RM691.94 million and net profit of RM89.13 million, Pentamaster’s revenue fell 10% to RM623.02 million and net profit dropped 27% to RM65.21 million in FY2024. The slowdown persisted in FY2025, which management described as a transition year, as revenue eased a further 6.3% to RM583.69 million while net profit slipped 5% to RM61.97 million.

Signs of recovery, however, are already emerging.

For the first quarter ended March 31, 2026, revenue surged 37.1% year on year to RM180.4 million — the group’s strongest quarterly performance in two years — while net profit climbed 37.3% to RM17.94 million. Revenue contribution was almost evenly split between ATE (48.1%) and factory automation solutions (51.3%).

Even so, surpassing its FY2023 record performance by FY2027 would require another significant step up in growth. Much of that ambition hinges on the Samurai Series successfully completing customer qualification and moving into volume production on schedule.

To prepare for Pentamaster’s next phase of growth, the group has been adding capacity, investing about RM300 million of internally generated cash over the past two years to build its third Penang campus. Roughly 40% of the facility remains in shell condition, leaving ample room for expansion as the Samurai production ramps up.

Filling up the remaining space with clean rooms, production flooring and mechanical services is expected to cost only RM20 million to RM30 million.

With the heavy capital expenditure now largely behind it, Pentamaster expects to resume dividend payments in the coming year after a two-year hiatus, provided earnings continue to improve, says Chuah.

Even as Samurai moves towards commercialisation, the group does not expect research and development (R&D) spending to rise materially. Chuah says annual R&D expenditure will remain at around 5% of revenue, supplemented by customer-funded development programmes and government support through the Malaysia Advanced Packaging Consortium (MAPC).

Pentamaster is also applying for pioneer tax incentives for the Samurai product family, which could further enhance its returns as the new platform enters volume production.

Beyond its investments, Pentamaster is benefiting from broader geopolitical shifts reshaping the global semiconductor supply chain.

As Western chipmakers increasingly diversify their supply chains away from China for strategically sensitive equipment, Chuah believes the group is well positioned to capture a larger share of advanced packaging opportunities. He argues that advanced packaging equipment has effectively become a repository of manufacturing know-how. During equipment development, customers inevitably disclose proprietary manufacturing processes, making trust as important as technology.

“It’s not that the Chinese machine can’t do it. It’s the process know-how that stops them from buying. Our customers tell us: ‘No China machines’,” he says.

The long lead times of incumbent European and American suppliers have further opened the door for new entrants. Some high-end inspection systems now carry delivery lead times of more than a year, prompting customers to qualify alternative vendors.

That has lowered the barriers to entry for Pentamaster, which has the capability to offer comparable technology with higher throughput and at a meaningfully lower cost than incumbent competitors, says Chuah.

While the Samurai Series dominates investor attention, Pentamaster’s factory automation solutions (FAS) division continues to provide stability. The business remains anchored by its medical device customers, even though Chuah says the customer base has become considerably more diversified to include other industrial customer segments in AI/data centre applications.

He expects FAS to continue contributing at least half of group revenue over the near term, expanding at roughly 10% annually before the Samurai Series eventually overtakes it as the group’s largest business.

Supporting both divisions is i-Flex, Pentamaster’s AI-powered manufacturing platform. Rather than relying on engineers to manually adjust production lines, the platform combines three-dimensional scanning, automatic alignment and AI databases capable of making real-time manufacturing decisions.

“Humans come and go. The database stays — and gets smarter,” says Chuah.

Even as Pentamaster positions itself for AI semiconductors, the chairman is already thinking about what comes next.

The company is now working with a US customer to build manufacturing equipment for humanoid robots or what Chuah describes as the coming “physical AI” wave. The project spans both businesses: factory automation systems for assembling humanoid robots and semiconductor test equipment for the chips that power them.

Commercialisation is expected in roughly two years.

Chuah is equally candid about the factors that could derail Pentamaster’s ambitious plans.

The first is the supply chain. High-end printed circuit boards sourced from Japan and Taiwan remain in short supply as global semiconductor giants absorb available production capacity, while Malaysia currently lacks manufacturers capable of meeting Pentamaster’s specifications.

The second is engineering talent. As Pentamaster expands into increasingly sophisticated semiconductor equipment, the competition for specialised engineers has intensified.

The biggest hurdle, however, remains customer qualification. “The first barrier of entry is very critical. Once you hit customer acceptance, it will fly very fast,” says Chuah.

Looking back, he acknowledges that Pentamaster was overly focused on the silicon carbide opportunity. “We were too busy with silicon carbide. We don’t want to miss the cycle anymore,” he says.

It is a lesson that now underpins the group’s strategy of building multiple technology platforms, reducing the risk of being overly dependent on any single semiconductor trend.

Importantly, Pentamaster enters this investment cycle from a position of financial strength. Despite spending more than RM300 million over the past three years to expand its manufacturing footprint, the group remained debt-free as at end-March 2026, with net cash of RM255.24 million.

Chuah is Pentamaster’s largest shareholder with a 19.76% stake. The group’s top 30 shareholders include a broad range of institutional investors such as the Employees Provident Fund, Kumpulan Wang Persaraan (Diperbadankan), Lembaga Tabung Haji, Amanah Saham funds, Hong Leong Asset Management, Kenanga Investors, as well as insurance funds managed by AIA and Prudential.

Pentamaster’s share price touched a two-year high of RM5.19 last Tuesday, giving the group a market capitalisation of RM3.69 billion. The shares were trading at a trailing price-earnings ratio (PER) of 54.2 times and a forward PER of 44.6 times. The stock has rallied 36.2% over the past 12 months, reflecting investor optimism in the AI-driven semiconductor investment cycle underpinning the group’s next phase of growth.

Valuation, however, has left analysts divided. While six of the 12 research houses covering the stock maintain their “buy” calls, the other six recommend “hold”. Their target prices range from RM3.90 (AmInvestment Bank) to RM6 (Maybank Investment Bank), with the consensus target price of RM4.96 implying a downside of about 2% to the last traded price of RM5.04 last Thursday. 

Read also:
Cover Story: Malaysia’s bid to become advanced packaging hub

PENTAMASTER Corp Bhd’s (KL:PENTA) co-founder and group executive chairman Datuk Chuah Choon Bin is candid about the opportunity the group almost missed.

While the Penang-based automation specialist was riding the silicon carbide and electric vehicle investment wave four years ago, Taiwanese automated test equipment (ATE) makers were quietly embedding themselves in Taiwan Semiconductor Manufacturing Co’s (TSMC) advanced packaging ecosystem — a market that has become one of the biggest beneficiaries of the artificial intelligence (AI) boom.

“Taiwanese players started five years ago because they had the opportunity to work with TSMC. Their revenues have jumped significantly. Malaysians are a bit late,” Chuah, 65, tells The Edge.

Late, perhaps, but not absent.

Two years ago, Pentamaster began developing what Chuah calls the Samurai Series — a family of advanced packaging machines that spans the semiconductor manufacturing workflow, from wafer inspection, probing and electrical testing to silicon photonics testing, interposer inspection, substrate inspection, packaging and final system-level testing.

Four product lines have already been deployed as demonstration units for customers in Taiwan, Europe and Malaysia, while the first commercial deliveries are expected by the end of this year before ramping up more meaningfully in 2027.

The initiative marks a strategic pivot. Rather than relying on the conventional ATE and semiconductor handlers that built the group, Pentamaster is betting its next phase of growth on higher-margin, higher-precision systems serving the AI chip boom.

The strategic shift is as much about survival as it is about growth.

Conventional semiconductor handlers — the pick-and-place machines that were once Pentamaster’s bread and butter — have increasingly become a commodity business.

“China players sell at half the price they used to sell. It’s a very difficult, very competitive market,” says Chuah.

“An ATE company like us cannot just focus purely on pick-and-place. We need to venture into testing.”

Advanced packaging, by contrast, requires an entirely different class of equipment.

Whereas traditional machines operated at a positioning tolerance of around 100 microns, Pentamaster’s latest systems target precision down to five to 10 microns. They must also measure electrical signals at picoampere and nanoampere levels while actively dissipating heat generated during AI chip testing.

“The precision today is no longer just mechanical. You are talking about electrical signals, low-noise signals, pico, nano … everything is becoming smaller and much more precise,” Chuah explains.

The technological leap is reflected in the pricing.

A single advanced packaging machine typically sells at roughly 10 times the price of Pentamaster’s conventional equipment. The higher engineering complexity also translates into substantially better margins, even though Chuah declines to quantify the improvement.

Pentamaster’s optimism rests on the purchasing behaviour of its advanced packaging customers. Unlike conventional equipment, which is often bought incrementally, advanced packaging systems are deployed in fleets.

“For one series of machines, they usually buy at least 30 to 100. Every year, they are looking at about 50 to 100 machines. Over two to three years, maybe 300,” says Chuah.

On the Samurai products under development, Chuah says the company is “very confident” of six of them, each of which he believes can eventually sell at least 50 units annually once customer qualification is completed.

Four demonstration systems have already been installed — two in Taiwan, one in Europe and one at a leading semiconductor foundry in Malaysia for silicon photonics applications. The systems include system-level testers, chiplet testers and a proprietary three-dimensional X-ray inspection platform capable of imaging bonding quality layer by layer inside stacked 2.5D and 3D packages — something conventional two-dimensional inspection systems cannot achieve.

One Samurai platform has already entered the supply chain of “one of the big GPU and CPU customers”, Chuah reveals. The equipment is being qualified through substrate suppliers working directly with the chip designer. “This is already a done deal,” he adds.

AI-related applications now account for about 20% of Pentamaster’s order book, which stood at RM480 million at end-March.

Another emerging opportunity is multilayer ceramic capacitors (MLCCs) — passive components used extensively in AI servers and data centres. Equipment for MLCC manufacturing currently contributes only about 1% of group orders, but Chuah believes the contribution could rise to around 10% as global manufacturers search for additional equipment suppliers amid industry capacity constraints in the race to ramp up production.

The commercial opportunity underpins Chuah’s optimistic outlook for Pentamaster. The chairman, who has a master’s degree in electrical and electronics engineering from the University of Auckland in New Zealand, expects the group to deliver double-digit revenue growth for its financial year ending Dec 31, 2026 (FY2026).

He responds without hesitation when asked whether Pentamaster could surpass its previous record performance. “Yes, in FY2027 when orders are fully captured,” he says.

Asked whether margins could surpass the net margin of roughly 17% achieved during the group’s previous earnings peak, Chuah replies, “It will be better.”

The confidence comes after a challenging down cycle for the semiconductor equipment industry that saw Pentamaster record two consecutive years of declining earnings.

After posting record results in FY2023, with revenue of RM691.94 million and net profit of RM89.13 million, Pentamaster’s revenue fell 10% to RM623.02 million and net profit dropped 27% to RM65.21 million in FY2024. The slowdown persisted in FY2025, which management described as a transition year, as revenue eased a further 6.3% to RM583.69 million while net profit slipped 5% to RM61.97 million.

Signs of recovery, however, are already emerging.

For the first quarter ended March 31, 2026, revenue surged 37.1% year on year to RM180.4 million — the group’s strongest quarterly performance in two years — while net profit climbed 37.3% to RM17.94 million. Revenue contribution was almost evenly split between ATE (48.1%) and factory automation solutions (51.3%).

Even so, surpassing its FY2023 record performance by FY2027 would require another significant step up in growth. Much of that ambition hinges on the Samurai Series successfully completing customer qualification and moving into volume production on schedule.

To prepare for Pentamaster’s next phase of growth, the group has been adding capacity, investing about RM300 million of internally generated cash over the past two years to build its third Penang campus. Roughly 40% of the facility remains in shell condition, leaving ample room for expansion as the Samurai production ramps up.

Filling up the remaining space with clean rooms, production flooring and mechanical services is expected to cost only RM20 million to RM30 million.

With the heavy capital expenditure now largely behind it, Pentamaster expects to resume dividend payments in the coming year after a two-year hiatus, provided earnings continue to improve, says Chuah.

Even as Samurai moves towards commercialisation, the group does not expect research and development (R&D) spending to rise materially. Chuah says annual R&D expenditure will remain at around 5% of revenue, supplemented by customer-funded development programmes and government support through the Malaysia Advanced Packaging Consortium (MAPC).

Pentamaster is also applying for pioneer tax incentives for the Samurai product family, which could further enhance its returns as the new platform enters volume production.

Beyond its investments, Pentamaster is benefiting from broader geopolitical shifts reshaping the global semiconductor supply chain.

As Western chipmakers increasingly diversify their supply chains away from China for strategically sensitive equipment, Chuah believes the group is well positioned to capture a larger share of advanced packaging opportunities. He argues that advanced packaging equipment has effectively become a repository of manufacturing know-how. During equipment development, customers inevitably disclose proprietary manufacturing processes, making trust as important as technology.

“It’s not that the Chinese machine can’t do it. It’s the process know-how that stops them from buying. Our customers tell us: ‘No China machines’,” he says.

The long lead times of incumbent European and American suppliers have further opened the door for new entrants. Some high-end inspection systems now carry delivery lead times of more than a year, prompting customers to qualify alternative vendors.

That has lowered the barriers to entry for Pentamaster, which has the capability to offer comparable technology with higher throughput and at a meaningfully lower cost than incumbent competitors, says Chuah.

While the Samurai Series dominates investor attention, Pentamaster’s factory automation solutions (FAS) division continues to provide stability. The business remains anchored by its medical device customers, even though Chuah says the customer base has become considerably more diversified to include other industrial customer segments in AI/data centre applications.

He expects FAS to continue contributing at least half of group revenue over the near term, expanding at roughly 10% annually before the Samurai Series eventually overtakes it as the group’s largest business.

Supporting both divisions is i-Flex, Pentamaster’s AI-powered manufacturing platform. Rather than relying on engineers to manually adjust production lines, the platform combines three-dimensional scanning, automatic alignment and AI databases capable of making real-time manufacturing decisions.

“Humans come and go. The database stays — and gets smarter,” says Chuah.

Even as Pentamaster positions itself for AI semiconductors, the chairman is already thinking about what comes next.

The company is now working with a US customer to build manufacturing equipment for humanoid robots or what Chuah describes as the coming “physical AI” wave. The project spans both businesses: factory automation systems for assembling humanoid robots and semiconductor test equipment for the chips that power them.

Commercialisation is expected in roughly two years.

Chuah is equally candid about the factors that could derail Pentamaster’s ambitious plans.

The first is the supply chain. High-end printed circuit boards sourced from Japan and Taiwan remain in short supply as global semiconductor giants absorb available production capacity, while Malaysia currently lacks manufacturers capable of meeting Pentamaster’s specifications.

The second is engineering talent. As Pentamaster expands into increasingly sophisticated semiconductor equipment, the competition for specialised engineers has intensified.

The biggest hurdle, however, remains customer qualification. “The first barrier of entry is very critical. Once you hit customer acceptance, it will fly very fast,” says Chuah.

Looking back, he acknowledges that Pentamaster was overly focused on the silicon carbide opportunity. “We were too busy with silicon carbide. We don’t want to miss the cycle anymore,” he says.

It is a lesson that now underpins the group’s strategy of building multiple technology platforms, reducing the risk of being overly dependent on any single semiconductor trend.

Importantly, Pentamaster enters this investment cycle from a position of financial strength. Despite spending more than RM300 million over the past three years to expand its manufacturing footprint, the group remained debt-free as at end-March 2026, with net cash of RM255.24 million.

Chuah is Pentamaster’s largest shareholder with a 19.76% stake. The group’s top 30 shareholders include a broad range of institutional investors such as the Employees Provident Fund, Kumpulan Wang Persaraan (Diperbadankan), Lembaga Tabung Haji, Amanah Saham funds, Hong Leong Asset Management, Kenanga Investors, as well as insurance funds managed by AIA and Prudential.

Pentamaster’s share price touched a two-year high of RM5.19 last Tuesday, giving the group a market capitalisation of RM3.69 billion. The shares were trading at a trailing price-earnings ratio (PER) of 54.2 times and a forward PER of 44.6 times. The stock has rallied 36.2% over the past 12 months, reflecting investor optimism in the AI-driven semiconductor investment cycle underpinning the group’s next phase of growth.

Valuation, however, has left analysts divided. While six of the 12 research houses covering the stock maintain their “buy” calls, the other six recommend “hold”. Their target prices range from RM3.90 (AmInvestment Bank) to RM6 (Maybank Investment Bank), with the consensus target price of RM4.96 implying a downside of about 2% to the last traded price of RM5.04 last Thursday. 

Read also:
Cover Story: Malaysia’s bid to become advanced packaging hub

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