Nanofilm could defer selected projects amid global chip shortage

NANOFILM Technologies on Tuesday said it is "preparing for the possibility of deferment of selected 3C projects from its initial production schedules" as a result of the current global chip shortage situation.

3C is the collective name of computer, communications and consumer electronics.

This was in response to a question submitted by shareholders ahead of the company's annual general meeting on Wednesday, about whether its business has been affected by the global chip shortages.

Nanofilm noted that the global semiconductor market has "experienced significant tightening in Q1 due to the continued strong demand for semiconductors across multiple industries"; it added that while the group's nanotechnology solutions are applied to a wide number of applications across multiple industries, some of those that it operates in "are not spared by the current situation".

The 3C industry, for instance, has faced increasing pressure in its supply chain compared to Q4 last year; the current chip shortage has started to impact manufacturer's projected production run rate.

However, Nanofilm said it understands that 3C manufacturers are "stockpiling chips in anticipation of continuing shortage and upcoming peak season production ramp-up to ensure that their products are able to reach end consumers". It thus believes that the supply chain should recover to its required production position and be ready for the new product launches in the coming months.

Separately, in the same statement, Nanofilm, commenting on its joint investment in Sydrogen Energy, said that hydrogen is expected to play a critical role as an energy carrier and fuel source, amid the global effort to reduce carbon emissions. As a result, given the "underlying characteristics and positive demand-supply balance", the hydrogen economy is expected to develop at a rapid pace, presenting potential business opportunities for Sydrogen, it added.

The company had on April 19 announced that it had entered into a non-legally binding term sheet with Temasek to jointly invest in Sydrogen.

Said Nanofilm: "Through the application of Nanofilm's advanced materials surface solutions to critical components in fuel cell and electrolyser systems, Sydrogen is poised to potentially bring about a tipping point in the mass and widespread commercial adoption of these technologies."

Shares of Nanofilm closed at S$5.31 on Tuesday, down S$0.03 or 0.56 per cent.