KUALA LUMPUR, Dec. 26 (Xinhua) -- Analysts have foreseen Malaysia's technology sector to continue to recover in 2024 despite some headwinds.
AmInvestment Bank said in its recent report that it expects more positive revenue recovery prospect of semiconductor players in 2024 given that the sector has bottomed out from the technology downcycle with a slow pace of demand recovery.
The research house also sees the technology players benefit from ongoing technology advancement for new products from automotive and consumer electronics segments with leading edge chips and new features as well as equipment tools.
PublicInvest Research opined that the semiconductor down-cycle is seen to have troughed, with 2024 deemed a recovery year.
This will be underpinned by the ongoing proliferation of Artificial Intelligence (AI) technologies into back-end systems which will benefit Malaysian players, in addition to a notable recovery in global smartphone sale, said the research house.
UOBKayHian is also bullish on the technology sector on improved earnings outlook in 2024.
According to the research house, local outsourced semiconductor assembly and test players' sales are expected to rebound 13 percent year-on-year in 2024 after contracting 8 percent year-on-year in 2023.
According to UOBKayhian, equipment makers also expect 2024 to make a strong comeback spearheaded by the ongoing investment cycle for medical devices and renewable energy.
While there have been green shoots of recovery with the year-on-year decline in monthly semiconductor sales gradually narrowing from high teens to low single digits, Kenanga Research only expects a meaningful recovery in the second half of 2024.
The research house did not expect the industry to start the year with a bang given an expected seasonally slow in the first quarter of 2024, after the year-end peak demand period for consumer electronics and automotives in the fourth quarter of 2023. ■