A Trump presidency could benefit Malaysian semicondcutor industry – analyst
29 Jul 2024
The Malaysian semiconductor industry could benefit from a second Donald Trump US presidency, according to Public Investment Bank Bhd (PublicInvest).
The research firm said that increased geopolitical tensions might drive more semiconductor companies to relocate to Malaysia, thanks to the country’s neutral position in the region and its strong semiconductor supply chain combined with cost advantages.
“To mitigate the potential risk of trade sanctions, we gather that more semiconductor customers plan to adopt the China + 1 and Taiwan + 1 policies by setting up a new footprint elsewhere.”
“Under the Trump government, we believe more restrictions will be imposed on US customers who source equipment from China, and also a steep rise in tariffs, which will make China’s imports more expensive,” it said.
PublicInvest said to address potential risks, US-China business partners might move their production lines and orders to a third country, which could benefit local players through increased orders and technology transfers from these multinational corporations (MNCs).
Additionally, the firm anticipated a renewed interest in local technology companies as valuations become more appealing, following a week of profit-taking in the sector.
“As we gather more positive guidance from respective management, we expect to see better financial performance in the second quarter, followed by strong momentum in the second half.”
“However, more volatility is also expected in tech stocks ahead of the US presidential election and the timing of interest rate cuts,” PublicInvest said.
Moreover, it mentioned that Nvidia’s release of its new Blackwell GPUs, combined with the rapid growth of large language models, is expected to transform nearly every industry and create new opportunities for local technology companies.
The firm continues to have an ‘Overweight’ rating on the technology sector, highlighting Inari Amertron Bhd, D&O Green Technologies Bhd, and QES Group Bhd as its top recommendations.
Source: NST
