KUALA LUMPUR (Jan 20): The US’ restriction on artificial intelligence (AI) chip exports is expected to have a limited impact on Malaysia’s semiconductor companies, which are primarily involved in assembly and testing, according to Nomura Asset Management Malaysia managing director and country head Leslie Yap.
The asset management firm remains positive on the sector, despite the Malaysian semiconductor companies’ sizeable exposure to the industry’s global supply chain, and lack of details to assess the actual impact on earnings of the sector’s proxies.
“In Malaysia, most of our companies are all part of the supply chain. We are doing the testers and assembly. So, I do not think our companies will be that badly affected (from the restrictions on AI chips),” Yap told the press, after the Nomura Asset Management Malaysia’s Breakfast Conference 2025.
“Malaysia has benefitted from growth in semiconductors (sector), and we will continue. So, we are [long-term] positive on the industry,” Yap said.
“One example (to showcase the long-term growth prospects) is [that] global semiconductor giant Infineon Technologies AG is investing in Malaysia; they are one of the largest players within the analogue semiconductor space,” he noted.
“At this point, I do not think we can pinpoint a number of companies that are going to experience a decline in earnings because of the AI chip ban,” Nomura Asset Management Co Ltd’s Japan growth equity investment department senior portfolio manager Ken Nagano said.
“However, the overall impression that I get is that the demand for AI-related investments is still going strong… The [Japanese] companies are not overly concerned (about the US AI chip export restriction),” Ken said, speaking on behalf of the Japanese market.
According to news reports, Malaysia has been classified as a Tier 2 country by the US, and permitted to import only 50,000 graphics processing units (GPUs) over two years, with data-centre operators restricted to deploying a maximum of 7% of their computing capacity in any single Tier 2 nation.
However, companies that meet US security requirements and headquartered in countries like Malaysia can apply for “National Verified End User”, or NVEU status, which allows them to purchase computational power equivalent to 320,000 advanced GPUs over the next two years.
The surprise policy decision in the US prompted analysts to caution on industry prospects, which in turn triggered some profit-taking in global chip players, that spilled over to Malaysian-listed proxies of the AI and data-centre segments.
Year-to-date, the KLCI is down 4.26%, partly as counters like AI data-centre proxy YTL Power International Bhd (KL:YTLPOWR) and data-centre leasing proxy Sime Darby Property Bhd (KL:SIMEPROP) fell. The Bursa Malaysia Technology Index is down 5.68% in the same period.
Other policies such as US trade tariffs and fund-flow volatility add to short-term challenges. However, they are unlikely to derail Malaysia’s growth trajectory, supported by a stable political environment, ample domestic liquidity, and investment support, Yap said.
“Last year, we (Malaysian equity market) did well because we have positioned ourselves as a place for data centres. We were also supported by the availability of liquidity in the domestic market, including pension funds.
“Foreign investors had also come back and looked at Malaysia, given our relatively stable political situation. Hence, our team also believes and hopes that these (positive) things can continue, (going forward).
“When you talk about fund flows, which are more short-term in nature, when you have concerns about the global economy, US interest rates, and potential Trump’s trade policies or tariffs, global investors may pull back to dollar-denominated assets (due to this uncertainity). They will want to wait for clarity on what is going to happen, before taking a view on emerging markets,” he said.
In Monday’s briefing session, Nomura Asset Management Malaysia Sdn Bhd launched the Japan Shariah Active Core Fund, to offer investors shariah-compliant exposure to Japan’s dynamic equity market.
The Nomura Japan Shariah Active Core Fund is the first Malaysian unit trust fund that primarily invests in shariah-compliant companies that are domiciled in, or derive their earnings from Japan.
The fund is available from Monday, for a minimum initial investment of RM1,000, or US$1,000. The Active Core strategy of the fund is designed to capture the essence of Japan’s evolving economy, without being tied to either value or growth investing, ensuring that the portfolio remains balanced and resilient.
This dual focus allows the fund to capture opportunities in high-growth sectors, while maintaining a strong foundation in value-oriented investments, offering a unique proposition to investors seeking both stability and growth, it said.
The fund focuses on quality companies with high growth potential, healthy profit margins, and strong intellectual property, pricing power and balance sheets. The strategy is backed by in-depth fundamental analysis identifying quality names with distinct competitive advantages, solid governance, stable cash returns to shareholders, and a consistent track record of attractive returns on capital, said the asset management firm.
Nomura Asset Management Malaysia and Nomura Islamic Asset Management Sdn Bhd are the Malaysian subsidiary companies of Nomura Asset Management Co, Ltd (NAM).
The combined total assets under management of both entities stood at RM36.6 billion as of Dec 31, 2024.