Chip sector in growth phase
05 Oct 2024
Survey: Improved business performance in the third quarter a positive sign
The semiconductor industry will continue to see growth for the next few months and recover on a gradual basis, Malaysian Semiconductor Industry Association (MSIA) president Datuk Seri Wong Siew Hai says.
MSIA’S recent quarterly pulse survey found 46% of respondent companies within the electrical and electronics (E&E) and semiconductor sector had seen an improved business performance in the third quarter (3Q24).
This was up by 39% as compared to 2Q24, signalling a positive trajectory despite slightly moderated optimism across the industry.
A total of 53% of companies are optimistic about 4Q24, indicating continued positive sentiment although this is slightly lower compared to the 60% optimism reported in 2Q24 for 3Q24.
For the next 12 months, 63% of companies expressed an optimistic outlook, a slight decline from the 72% optimism expressed in 2Q24.
Commenting on the performance, Wong said the performance actually varies depending on which business companies are involved in. “For those who are involved in artificial intelligence (AI), we actually see growth in their performance.
“However, for those in other industries (within the sector), you can see that they are recovering but not as good as expected,” he told Starbiz 7.
Supporting this claim, Maybank Investment Bank (Maybank IB) Research stated the sector sales would be increasingly driven by emerging sectors such as AI, high-performing computing, data centres and electric vehicles.
The brokerage said total semiconductor sales would continue to be dominated by consumer electronics such as personal computers and smartphones.
Earlier this year, it was reported that the semiconductor sector is poised for recovery, especially in the second half of 2024 (2H24).
Wong reiterated that the recovery will still happen, however, at a more gradual pace.
He shared that month-onmonth, the industry has seen a positive trend and over the next few months, the industry will continue to see growth.
On the matter of the investment outlook, the survey found 52% of companies are reported to be optimistic for 4Q24 – a marginal decline from 58% in 2Q24.
Companies are also expected to see a slight reduction in hiring engineers and technicians in 4Q24 by 71%. MSIA said talent shortages and market competition continue to be the primary challenge for the industry.
This is in addition to challenges such as cost pressures and supply chain disruptions, as well as a more pronounced inflation.
Hence, in order for these companies and the industry to thrive, Wong said issues on the talent shortage must be addressed, infrastructure must be enhanced and competitiveness has to be strengthened through strategic investments and government support.
“With the right policies in place, Malaysia’s E&E sector will continue to be a major contributor to our nation’s economic growth,” he said, adding the 2Q24 survey results reflect the resilience and adaptability of Malaysia’s semiconductor industry.
“For those who are involved in artificial intelligence, we actually see growth in their performance.” Datuk Seri Wong Siew Hai.
Source: The Star
