KUALA LUMPUR, Oct. 9 (Xinhua) -- Malaysia's technology sector is set for a recovery, fuelled by accelerating investments in artificial intelligence (AI) and high-performance computing (HPC), and improved semiconductor sales.
In its recent report, Kenanga Research has turned positive on Malaysia's technology outlook amid resilient semiconductor momentum, accelerating AI/HPC-driven capex, firmer autos, and contained tariff risk.
According to the research house, the latest semiconductor data has reinforced its view that the current 21-month upcycle can extend into mid-2026 (or beyond) on structural AI, HPC, 5G, and next-gen smartphone drivers.
It noted that global semiconductor sales rose more than 20 percent year-on-year in July, led by logic and memory on robust data-center spend and early AI-edge adoption.
Incorporating the latest run-rate, World Semiconductor Trade Statistics has raised its 2025 market forecast to 728 billion U.S. dollars and projects 800 billion U.S. dollars in 2026.
"With autos recovering, underpinned by rising electric vehicle (EV) penetration, medium-term demand visibility for auto-exposed tech is improving," it added.
Meanwhile, MBSB Research anticipates sequential recovery in Malaysia's technology end-market will continue to be seen in the fourth quarter.
This is supported by the easing trade and tariff risk as well as new model launches, particularly in the case of smartphones and automotive.
"However, we remain doubtful on the year-over-year growth prospects as the pace of recovery has not been forthcoming," it noted.
It also highlighted that there remains downside risk to the sector, depending on the severity of the upcoming semiconductor tariff.
TA Securities also said in a note that global semiconductor sales are projected to continue expanding, underpinned by AI demand and inventory replenishment.
"Malaysia's medium-to-long-term semiconductor outlook is supported by the implementation of the National Semiconductor Strategy," the research house noted.
However, it opined that there are still lingering uncertainties surrounding potential U.S. semiconductor tariffs. ■