KUALA LUMPUR (Aug 9): The recent market correction presents a good opportunity for investors to collect oversold semiconductor stocks, said TA Securities, which maintained its “overweight” stance on the industry.  

"Additionally, the potential end of the rate hike cycle in the US this September will bode well for the sector’s valuations," it said in a note on Friday.

Following the recent share price weakness, the research house upgraded its recommendations for Unisem M Bhd (KL:UNISEM),  Malaysian Pacific Industries (KL:MPI) and  Elsoft Research Bhd (KL:ELSOFT)   from “hold” to “buy”.

Meanwhile, TA Securities maintained its “buy” recommendation on Inari Amertron Berhad (KL:INARI)    

The local semiconductor space is expected to continue seeing gradual earnings recovery, underpinned by an anticipated recovery in global demand and increasing trade diversion opportunities, the research house said. 

In June 2024, the global semiconductor continued its upward trajectory after posting another decent sales growth, it added.

Citing the Semiconductor Industry Association, global semiconductor sales during the month stood at US$50 billion (RM223.6 billion) — representing a 1.7% month-on-month (m-o-m) growth and an 18.3% year-on-year (y-o-y) growth — versus US$49.1 billion in May 2024. 

This effectively marked a y-o-y sales recovery for the eight consecutive month, while m-o-m recovery increased for the fourth consecutive month.  

“This further affirms that the global semiconductor market is in an upcycle currently”, TA Securities said.