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E-mail Xinhua, April 15, 2024
KUALA LUMPUR, April 15 (Xinhua) -- Analysts have in recent reports held mixed views on Malaysia's technology recovery path.
RHB Research said in a report that it is positive on the sector as it is positioned to the new upcycle.
According to the research house, the 2022-2023 downcycle that lasted for five quarters has come to an end after several delays.
It said the uptick seen in world semiconductor sales and sustained recovery in the memory space -- signaling the onset of a new upcycle -- is supported by the end of inventory correction and sturdier demand in the smartphone space and applications related to artificial intelligence (AI), especially in China.
In addition, it said early recovery indications in the automated test equipment (ATE) space, along with traction in the front-end semiconductor space, bolster its belief in a sustained sector recovery that is expected to gain pace in the second half.
Kenanga Research, however, opined that although the sector has bottomed out, its recovery momentum has lagged.
Although global semiconductor sales have picked up in recent months, the research house opined that it takes time to be fully transmitted to local players that are mostly at the back end of the supply chain.
"We expect a slow start to 2024 due to the seasonally slow first quarter on the heels of the year-end peak demand period for consumer electronics and automotives in the fourth quarter of 2023 (which has been slightly underwhelming given the weak global economy)," it said.
MIDF Research also continues to view that the pace of recovery may remain tepid in 2024. Segment-wise, the research house opined that the automotive and AI-related end market could potentially garner a bigger proportion of the total sales.
In line with the historical trend, MIDF expects the sector's production activity to pick up pace towards the end of the second quarter of 2024. However, given the stiff competition, it does not discount the possibility that it could be observing a slower momentum of increase. Enditem
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