This article was published in The Edge Malaysia Weekly on 19 July 2021 – 25 July 2021.
It's amazing to think how far ViTrox Corp Bhd has come since it was founded in Chew Jian Wen's 100-square-foot rented bedroom in Sungai Dua, Penang in 1998. At the time, the 28-year-old had just quit his job as a professional engineer at Hewlett-Packard (M) Sdn Bhd to set up the company with his university friend and colleague Steven Siaw Kok Tong with just RM20,000 borrowed from family and friends.
Former intern Yeoh Shih Hoong was then appointed as a director and ViTrox was officially established in 2000. Currently, Chu is the group's managing director and single largest shareholder with a 26.9% stake, while Siaw and Yeoh sit on the board as executive director and executive vice president, holding 19.09% and 10.25% shares respectively.
With lofty ambitions to make a positive impact on the world, the trio built ViTrox into an industry leader in machine vision technology. Today, headquartered in Batu Kawan Industrial Estate with a built-up area of 450,000 square feet, the company is one of Malaysia's largest automated test equipment (ATE) manufacturers and, with a market capitalization of over RM7 billion, is also one of Malaysia's most profitable semiconductor-related companies.
Below are excerpts from The Edge’s exclusive two-hour interview with the co-founders.
Edge: It’s been more than three years since our last interview about ViTrox’s company development. How is it going?
Chu Zhen Wen: One of the reasons I accepted this interview is because I want to inspire more local tech companies with what we've done over the years and what we're going to do over the years to come. It's not about financial numbers or anything like that, it's about our core values, culture, purpose, and vision and mission. We want to make a positive, lasting impact on the world. We want to be a conscious company.
Today, ViTrox is one step closer to realizing our vision of becoming the most trusted technology company in the world. We are excited to have entered the right industry at the right time, as the world is experiencing the Fourth Industrial Revolution. We have been able to ride the megatrends of our time.
I've heard that there are three big events that inspired you to become who you are today. First, a used Pentax camera given to you by your mother in 1990. Second, a camera attached to a machine in an HP production plant. And finally, a visit to the HP Garage in 1995. How has your corporate journey been so far?
Kiss: It has been an amazing journey as an entrepreneur. Today I feel fresh and full of energy. I believe that ViTrox, now as a local technology company, has an obligation to contribute more to our country, the planet and future generations. This is a never-ending journey and we will continue to hold to our original motivation and belief of building a great technology company.
However, ViTrox's success does not come from me alone, but from our team of dedicated and passionate ViTroxians who believe in our vision and work tirelessly towards the vision we set together. I am grateful for the opportunity to work with so many amazing people. With strong belief, determination, perseverance and hard work, we have accomplished many seemingly impossible missions. We walk the talk and live by our core values.
My co-founders, Steven and See Hoon, have given me unparalleled support and generosity. [have made many] We thank them for their sacrifices over the past 20 years – without their selfless support and that of all dedicated ViTroxians, we would not have achieved what we have today.
You and Steven previously worked in HP's Machine Vision group. Why did you decide to leave high-paying jobs at multinational corporations (MNCs) to start your own company? Was it a career risk you took at the time?
Kiss: Stephen and I were young then. We had good jobs in multinational companies and were living good lives, but we knew we could do better and have a better future. We were young and willing to take risks because we knew that if we failed, we could go back to the corporate world. So, we used our savings, borrowed money from family and friends and started a business from my bedroom.
Stephen Siau Kok Tong: We took calculated risks and prepared for the worst-case scenario if our venture did not work out. An opportunity was presented to us to work on some projects with local clients and we, with little hesitation, dove into the job. It was a classic case study of “opportunity meets preparation” that yielded favorable results and outcomes. Though we faced many unknown challenges and uncertainties at the time, our progress was driven largely by our strong belief and faith and conviction that we could make this happen and succeed, and we took it step by step. Meanwhile, being a new entrant and solution provider in this market, we always remained cautious and humble. We remained open and growth-oriented to learn from our customers and competitors to get better.
How did ViTrox, a small local supplier in its early days, compete with larger companies from Japan, Europe and the US?
Kiss: Our resources and capabilities were very limited. All we could offer was what we had: a working solution that was much cheaper than overseas suppliers. We provided free software customization, fast service and support, when and where they needed it. To this day, we are committed to serving our customers so they can use our system to win more orders. We conduct our business with uncompromising integrity and focus on long-term success, not short-term financial gain. We make sacrifices and do things our competitors won't.
Yeo Si Hoon: By accepting feedback openly, we improved our software accordingly and fixed bugs whenever and wherever they arose, for free. In the end, we weren't too far behind the big players and our customers loved us. We never charged our customers exorbitant fees and focused more on “getting the job done” than on “profitability”. Sometimes, we even took losses to get the job done. The key here is that if our customers can get more orders using our vision system, they will continue to buy more from us in the future.
On the corporate side, how do you see Vitrox in the next 3-5 years? What do you see ahead for the company? What is the ultimate goal that ViTrox wants to achieve?
Siaw: For us, the next big challenge is the application of technology for humanity and its betterment. We are talking about Artificial Intelligence (AI), robotics, autonomous and predictive decision-making systems. With inspection and sensing capabilities and, more importantly, the goal of increasing productivity and minimizing production waste due to quality issues, ViTrox will continue to support and adopt Environmental, Social and Corporate Governance (ESG) initiatives and best practices. In my view, the applications will no longer be limited to electronics manufacturing but will extend to other industries such as agritech and healthcare.
ViTrox is already one of the largest ATE manufacturers and semiconductor-related companies in the country, and many investors must be wondering how far the company can actually grow.
KissViTrox is not going in the direction of ATE only. Maybe two or three of our business units will focus on ATE and become the best in the world. But as a group, we want to move up the value chain and become an innovative technology company. We also want to use our technology and equipment to expand into other areas, such as precision smart agriculture (see accompanying article). As long as we can make a positive contribution to the world, we will go forward.
Currently, we have 600 customers, none of which account for more than 10% of our revenue. As a local company, our customer base is very diversified. Also, in terms of market segments, we do not serve only the semiconductor industry. So, when one industry is going through a down cycle, the impact is mitigated by another industry going through an up cycle.
US semiconductor equipment giant Applied Materials has a market capitalisation of US$124 billion (RM520 billion), while Netherlands-based semiconductor equipment maker ASML Holding NV is valued at €250 billion (RM1.2 trillion). Do you expect ViTrox to become as big as it in the future?
Kiss: To be honest, there is no clear answer. Maybe they can, maybe they can't. But these equipment giants serve a very niche and high-end market. It takes a lot of talent and resources to get as big as them. I don't think Malaysia has the ecosystem for local companies to get as great as them. They have a lot of enough talent, PhDs and experience to get to that level. We want to dream big, but we have to be realistic.
Looking at the global industry outlook, what are the market opportunities and challenges in the coming years? Over the years, we have talked about AI, 5G, Internet of Things, cloud computing, autonomous vehicles and electric vehicles. What are your strategies and plans for ViTrox to soar to new heights?
Siaw: We are continually developing solutions to address the application needs of industry trends for years to come. Our constant focus and investment in R&D allows us to stay ahead of the curve by introducing cutting-edge inspection solutions that address new product form factors, demanding requirements, and the inherent complexities of new applications. This strategy has helped us capture new market share and increase the confidence of our customers to partner with us as their long-term partner in new product development and volume production.
Is ViTrox actively looking at mergers and acquisitions (M&A) or will it focus on organic growth?
Yo: We continue to look for good M&A opportunities. Our main focus is still organic growth, but we don't rule out M&A when a good opportunity comes along. Various aspects need to be considered, including synergy, management team, culture, and investment. ViTrox wants to lead by example. If there are 1,000 or even 10,000 companies like us in the future, I believe our country will be self-reliant by then.
Can you tell us about ViTrox’s 10-year expansion master plan?
Kiss: Over the next 10 years, we want to expand our floor space from 450,000 square feet to more than 2-3 million square feet. We plan to invest more than RM2 billion over the next 10 years. We also want to increase our employee headcount from less than 1,000 today to about 3,000-5,000 over the next five years.
We plan to establish technical schools and universities that are people-centered and emphasize practical, hands-on learning — we want to develop people who are creative, energetic, compassionate, competent and ready to work tirelessly to solve the world's problems.
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