THE local technology sector is benefiting from strong global semiconductor demand, particularly as artificial intelligence (AI) infrastructure and data centre (DC) investments continue to expand.
Global semiconductor sales rose 135.1% year-on-year and 6.4% month-on-month to US 146.6 bil in July, marking 17 consecutive months of growth.
MBSB Research believes the strong momentum could allow 2026 sales to surpass its US$1,511.2 bil projection.
However, the research house highlighted a major constraint for Malaysia: a shortage of skilled technology talent.
The local industry reportedly needs around 50,000 skilled engineers to meet current demand, while only about 5,000 engineering graduates enter the workforce each year.
The National Semiconductor Strategy aims to train 60,000 highly skilled engineers by 2030, but the current shortage is already limiting potential earnings growth.
The challenge comes as Malaysia seeks to move beyond traditional back-end semiconductor assembly and testing into areas such as advanced packaging, integrated circuit design and innovation-led manufacturing.
Meanwhile, countries across Southeast Asia are competing to attract semiconductor investments under “China+1” and “Taiwan+1” strategies.
MBSB Research sees Vietnam as one of Malaysia’s key competitors due to its similar ambitions.
The global smartphone market also remains mixed. Second-quarter 2026 shipments fell 6.7% year-on-year, although Apple and Samsung recorded shipment growth of 14.9% and 8.1% respectively.
MBSB Research expects Apple’s upcoming product launches to continue supporting the premium segment and potentially benefit its supply chain.
Meanwhile, local outsourced semiconductor assembly and testing (OSAT) stocks have gained 41% to 53% year-to-date, with valuations of 35 to 42 times price-to-earnings already above their five-year averages.
MBSB Research cautions that earnings growth could be capped by talent shortages, while any slowdown in second-half 2026 earnings could trigger share price pullbacks.— Focus Malaysia
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