U.S. trade policy remains concerning for Malaysia's technology sector: analysts
TA Securities said in its recent note that should the U.S. implement sector-specific tariffs on semiconductor imports, it could materially impact end-market demand and Malaysian technology corporate earnings.
According to the research house, heading into the second half, there are three major factors that could potentially influence the sector's earnings, U.S. policies; global semiconductor sales; progress of Malaysia's National Semiconductor Strategy.
"Should the U.S. administration proceed with imposing tariffs on semiconductor imports, it could severely disrupt the global supply chain and dampen end-user demand," the research house said.
Hence, it believed the policy risk will likely persist in the coming months, potentially leading to delays in orders and capital expenditure plans as corporates adopt a more conservative approach in response to the lack of policy visibility.
Meanwhile, TA Securities noted that the global semiconductor market was still undergoing an upcycle, with positive momentum expected to continue into the second half.
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