KUALA LUMPUR, April 10 (Xinhua) -- Malaysia's technology sector outlook remains broadly positive into 2026, underpinned by AI-driven semiconductor demand and a sustained global upcycle, but analysts are increasingly divided over rising risks from memory supply tightness, cost pressures and geopolitical tensions that could weigh on downstream demand, according to multiple research houses.
Malaysia's technology sector is expected to see a broadening of structural demand recovery into 2026, driven by sustained investment in AI infrastructure, optical connectivity, advanced packaging and semiconductor back-end equipment, Apex Securities said in a note on Thursday.
Based on its site visits and company results briefings, the research house said three consistent trends have emerged across the sector: order pipelines remain healthy, capacity expansion plans are progressing, and customer qualification cycles are gradually translating into revenue recognition.
Separately, Kenanga Research said in its recent report that the global semiconductor upcycle remains intact, with industry revenues still on track to approach 1 trillion U.S. dollars by 2026, underpinned by structural drivers including AI, high-performance computing (HPC), 5G and next-generation device upgrades.
However, the research house noted that gains are becoming increasingly concentrated, as AI-driven demand tightens memory supply and shifts benefits towards AI infrastructure at the expense of non-AI end markets.
"While AI-driven demand remains supportive of memory-led wafer fab equipment spending, which should continue to outpace other segments, it also raises affordability risks and margin pressure across the wider technology chain," Kenanga said.
Kenanga has turned more cautious on the sector, downgrading its outlook due to rising external risks, including global memory tightness, supply-chain fragility and persistent cost pressures across the value chain.
Meanwhile, MBSB Research warned in a recent note that geopolitical tensions in the Middle East could weigh on global semiconductor demand. ■
