Maybank IB Research said it saw limited direct impact from potential AI-related chip export curbs by the United States.
PETALING JAYA: The potential curbing of artificial intelligence (AI)-related chip exports by the United States is expected to have a limited impact on Bursa Malaysia’s technology index.
In a research note, Maybank Investment Bank (Maybank IB) Research pointed out that the divergence in growth prospects between the electronics manufacturing services (EMS) and semiconductor sub-sectors stems from differing levels of exposure to AI and data centre trends.
“Although semiconductor sector growth is likely to be subdued in 2025, we expect it to fare better in 2026 as macro headwinds ease and AI-related initiatives reach full gestation,” it noted.
While acknowledging that Malaysia’s tech supply chains are not deeply embedded in the global AI ecosystem, it saw limited direct impact from potential AI-related chip export curbs by the United States.
“The potential curbing of AI-related chip exports may directly affect only a few local names in the supply chains of graphics processing unit and central processing unit servers.
“Hence, the direct impact on the Bursa technology index is limited and the local tech supply chains are insignificant in the global AI supply chain,” it noted.
Maybank IB Research maintained its “neutral” rating on the semiconductor sub-sector, highlighting several headwinds, such as limited AI-centric product exposure, reliance on soft end-demand from China and margin compression due to overhead cost pressures.
“We expect the outlook for the semiconductor sector to remain challenging in the near term,” it noted.
Maybank IB Research expects no downside surprises in first half of 2025 results due to sustained plant utilisation rates above breakeven levels.
However, the research house remained cautious about the broader sector’s growth trajectory, noting that “the confluence of these factors is likely to throttle sectoral growth.”
In contrast, RHB Research retained its “overweight” stance on the technology sector, supported by expectations of a broad-based recovery in 2025.
Citing the Semiconductor Industry Association’s (SIA) forecast, the research firm said world semiconductor sales is now expected to grow by 19% year-on-year (y-o-y) to US$626.9bil in 2024 and 11.2% y-o-y this year.
“Early recovery indications in the automated test equipment space and traction in the front-end semiconductor space bolster our expectations of a sustained sector recovery, supported by technology advancements and the replacement cycle,” RHB Research noted.
“A broad-based recovery is expected in 2025, with growth from all segments,” it added.
Meanwhile, Maybank IB Research highlighted a “positive” outlook particularly for local EMS players due to global outsourcing trends and growing exposure to data centres.
“We expect the EMS sector’s earnings to rebound in 2025, on the back of increased inbound foreign direct investments from trade diversion, new product/technology initiatives centered around the data centre boom and order wins from new/existing customers,” it said.
Maybank IB Research also expects domestic EMS players to secure price adjustments from key customers to offset impending labour cost increases, thus allowing for a smooth cost pass-through with minimal impact on margins.
