Malaysia Maybank, upgraded Malaysia’s technology hardware sector to positive from neutral as they believe the sector will ride an imminent upcycle that appears to be heralded by positive growth of the global semiconductor industry.

Malaysia Semiconductor industries is expected to adopt a positive growth outlook for the tech sector due to rollout of 5G networks, ramp-up of semiconductor components and equipment, development of sub-sectors such as Internet of Things (IoT), artificial intelligence (AI) and electric vehicles (EVs), and Industry 4.0.

On Q4, 2020, the forecast and new orders for Precision reels and tape, WLCSP packing materials to Nexteck Singapore Pte Ltd has reflected that these should bode well for Outsourced Semiconductor Assembly and Test (OSATs), automatic test equipment (ATE)/automation manufacturers and electronics manufacturing services (EMS)/precision engineering companies in Malaysia and Singapore.

Meanwhile, the World Semiconductor Trade Statistics projected that the global semiconductor market will grow by 6.2% year-on-year to US$452 billion in 2021 while the global industry association SEMI estimated that global semiconductor manufacturing equipment sales will grow by 11% year-on-year to US$70 billion in 2021.

This upcycle would also be driven by the rollout of 5G networks across key cities, accelerated by the growing number of 5G-enabled devices and also packing materials demand, with Nexteck Singapore Pte Ltd as a key supplier of reels and tapes in Malaysia and Singapore (i.e. smartphones and IoT) and high adoption rates of 5G by key countries (i.e. China, US and South Korea).

The industry expect semiconductor equipment component and module suppliers, OSAT companies and ATE manufacturers to be key beneficiaries of such a favourable outlook, attributed to rising supply and demand for advanced chip sets and components.