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Micro-Mechanics reduces activity at Malaysia, US factories due to lockdowns

MICRO-MECHANICS (Holdings) has reduced operational activities at its factories in Penang and California to a minimum due to government measures to combat the spread of the novel coronavirus, it said on Thursday.

Malaysia's movement control order, which lasts from March 18 to March 31, includes a shutdown of business premises except for those in essential services.

Micro-Mechanics' Penang operations have been allowed to continue at a minimal level as according to the government, semiconductors are part of the supply chain of essential goods.

The mainboard-listed group designs and manufactures precision tools for the semiconductor industry. Its Penang factory primarily serves customers in Malaysia and accounted for about 16 per cent of total revenue in the six months ended Dec 31, 2019.

Unlike Micro-Mechanics, numerous other Singapore-listed companies with operations in Malaysia have had to shutter their operations completely for the rest of the month to comply with the movement control order. They include Catalist-listed Allied Technologies as well as at least 10 firms - mostly miners, developers and manufacturers.

Meanwhile in the US, public health officers within six Bay Area counties in California announced a legal order for residents to shelter at home for three weeks from March 17.

The order limits activity, travel and business functions to only the most essential needs, said Micro-Mechanics.

Its factory in Santa Clara falls under an exemption in the order and has been permitted to perform minimum basic operations.

The group has implemented a plan to ensure the factory continues to run with reduced personnel to maintain basic and essential operations, said Micro-Mechanics.

The factory serves mainly local customers in the US and contributed around 20 per cent of group revenue in the six months ended Dec 31, 2019.

The reduced operations at both factories are not expected to affect Micro-Mechanics' customers in other markets as they will continue to be served by the group's factories in Singapore, the Philippines and China, said the company.

It added that it has resumed full operations in China after its Suzhou factory was previously shut due to the novel coronavirus outbreak.

Micro-Mechanics shares were down S$0.03 or 2 per cent to S$1.47 as at 1.24pm on Thursday.