Malaysia's semiconductor sector is set for growth under the National Semiconductor Strategy (NSS), which aims to elevate the country in the global market. Launched on 29 May 2024, the NSS has become a focal point of discussions among representatives from the Ministry of Investment, Trade and Industry (MITI), Dagang NeXchange (DNeX), and the Institute of Strategic and International Studies (ISIS). MITI reported that Malaysia is currently the sixth-largest semiconductor exporter globally, with aspirations to move into the third or fourth positions, as cited by RHB Investment Bank Bhd (RHB Research) in their report today.
RHB Research has given optimism for several stocks in the technology sector. Ratings include Buy for Coraza Integrated Technology with a target price of RM0.62, CTOS Digital at RM1.73, Datasonic Group at RM0.68, Malaysian Pacific Industries at RM38.50, Pentamaster Corp at RM5.95, and Unisem (M) at RM3.93. Neutral ratings have been given to Globetronics Technology at RM0.68, Inari Amertron at RM3.06, and JHM Consolidation at RM0.52.
The NSS employs a three-phase approach to advance the semiconductor value chain: enhancing current capabilities, exploring new frontiers, and driving innovation. Various incentives, such as investment tax allowances and import duty exemptions, will support these efforts. DNeX, through its SilTerra division, aims to lead in wafer processing, particularly in complementary metal-oxide semiconductor (CMOS) fabrication, while also expanding into life sciences and silicon photonics.
Despite the potential, challenges such as supply chain resilience, cost competitiveness, and talent acquisition remain. Initiatives like Collaborative Research in Engineering, Science, and Technology (CREST) have been introduced to address talent shortages in the industry. A green framework is also being developed to align the sector with environmental, social, and governance (ESG) standards.
With a fiscal support allocation of MYR25 billion for development expenditure, the NSS aims to transform Malaysia into a global leader in the semiconductor industry, although risks such as softer consumer demand and geopolitical tensions persist.
