KUALA LUMPUR (Jan 9): Malaysia’s technology stocks broadly fell on Thursday following news reports that the US is planning to impose further export curbs on artificial intelligence (AI) chips to keep them out of the hands of China and Russia.
“Persistent challenges stemming from protectionist policies remain a significant concern, reminiscent of 2018 when the global semiconductor supply chain faced major disruptions, resulting in volatile input costs across industries during the trade war,” BIMB Securities said.
Malaysia’s tech stocks are concentrated in the outsourced semiconductor assembly and test (OSAT) segment, which will likely encounter intensifying challenges in the near term due to trade tension escalations with the incoming Trump administration, the research house said in a note on Thursday.
Inari Amertron Bhd (KL:INARI), Malaysia’s biggest tech stock by market capitalisation and an OSAT company, slipped 1.7% while Vitrox Corporation Bhd (KL:VITROX) fell more than 5%. Selling pressure also hit digital services firms like MyEG Services Bhd (KL:MYEG) and ITMAX System Bhd (KL:ITMAX).
Bursa Malaysia Technology Index, which tracks 49 stocks in the sector, was down more than 2%. The index fell into bear territory by the middle of 2024 amid fears of a US economic recession before eking out a 2% gain by the end of the year.
The outgoing Biden administration is planning one additional round of restrictions on the export of advanced chips used in data centres on both a country and company basis, Bloomberg reported, citing unidentified people familiar with the matter.
The goal is to concentrate AI development in friendly nations and getting businesses around the world to align with US standards, resulting in restrictions that would apply to “most of the world” when they are announced as soon as Friday, the news service reported.
Shares of Nvidia, the leading maker of AI chips, and closest rival Advanced Micro Devices Inc dipped following Bloomberg’s report. Nvidia objected to the proposal in a statement, saying that the curbs “would not reduce the risk of misuse but would threaten economic growth and US leadership”.