KUALA LUMPUR, Sept. 18 (Xinhua) -- While global semiconductor sales are projected to continue growing, analysts have maintained a cautious outlook on Malaysia's semiconductor sector given the lingering uncertainties surrounding U.S. trade policy.
TA Securities said in its recent note that any substantial tariff on semiconductors would inevitably weigh on Malaysia, as the industry is deeply integrated into global supply chains.
"A steep tariff could undermine Malaysia's export performance, as higher tariffs would drive up production costs, part of which may be passed on to customers, ultimately weighing on demand," it said.
According to the research house, Malaysia is one of the world's top six semiconductor exporters, accounting for roughly 7 percent of global exports and about 13 percent of the global assembly, testing, and packaging market.
Meanwhile, Hong Leong Investment Bank Research said in its recent note that Malaysia's earnings season for the Malaysian technology/electronics manufacturing services (EMS) sector was incrementally better, but performance remained uneven.
"While the above-below ratios improved versus the first quarter, company-specific misses persisted, and EMS players are showing early signs of weakness amid tariff uncertainty," said the research house.
CIMB Securities, on the other hand, has lowered Malaysia's technology sector 2025 to 2027 earnings forecasts by 7 percent to 11 percent, factoring in foreign exchange (forex) headwinds from a strengthening Malaysian ringgit against the U.S. dollar and narrowing margins from higher operating expenditure, partly linked to tariff implementation.
"While our channel checks suggest that customers can absorb part of these additional costs, this is likely to result in softer sales volumes," the research house said. ■
